Shadow Economy as a Self-Adjustment of Poverty and a Signal from Invisible Hand

  •  Natalia Victorovna Kuznetsova    
  •  Ekaterina Vasilievna Kuznetsova    


The article determines the necessity to consider shadow economy as an indicator of required essential changes.Shadow economy serves as a methodological tool for evaluation of consumer needs and real potential of anational economy and business, as well as a tool that exposes underdeveloped national laws regulating economicactivities. The latter is possible because built up layers of unnecessary laws that prevent business freedom,excessive interfering of government regulation with a national economy, and contradictory bureaucraticprocedures impact developing of shadow economy. It was proved that one of the tools for overcoming shadoweconomy is the development of small business. As a rule, the reasoning behind operating business in the shadowsector involves inadequate obstacles on the way of entering legal and registered market, high taxes, andcorruption. However, people have no protection, and their risks are too high in the shadow sector.

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