http://finance.fortune.cnn.com/2014/02/14/spain-underground-economy/
We have all heard of the economic crisis in Spain. We've all heard about it on the news and in every major macroeconomic discussion. However, what we haven't heard about, is the side of the Spanish economy that is actually doing remarkably well. The underground economy, otherwise known as the black market. AS the economy continues to falter in Spain with an unemployment rate of over 26 percent and high increases in personal tax, the underground Spanish economy has grown significantly as it now actually properly competes with the legitimate aspects of the Spanish economy. The underground economy in Spain now actually accounts for over 24 percent of the actual Spanish GDP and you have to wonder whether or not other countries that are going through similar economic crisis's are faring any similarly? According to the article in question, apparently there is a trend. Comparing Spain to countries going through similar economic conditions, we actually do witness a sort of competition between such countries. Greece and Zimbabwe are mentioned in the article and apparently the trend is as such, the worse off your economy, the better off your black market. This yet again raises another question, when people tend to lose faith in their economic system, do they really see the black market as a legitimate economic alternative? It seems that way in countries like Spain, where if the situation doesn't improve soon, things might look a bit too ominous for the "actual" Spanish Economy.
This is an interesting finding. I do believe that citizens can't rely on the Spanish economy, so finding an alternative might seem like a legitimate option. In my opinion, this is prohibiting Spain to flourish. Not only is it taking away from the economical factors, but the trust in the system is also falling, along with the current government controversies in financial mismanagement.
ReplyDeleteI think it would be neat to track the number of billionaires in Spain from the beginning of the crisis to the "end" (whenever it may be). It might be a case similar to Moscow where the black market causes a large number of Billionaires to be made
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