Definition
- Hidden economy
- The hidden economy is cash-in-hand work and illegal sales, which belong in GDP but largely go unrecorded because they are hard to track.
Example
Can you think of an example of hidden economy?
A plumber paid £200 in cash who never tells HMRC has produced a service that belongs in GDP. No record reaches the statisticians, so GDP comes out too low unless they estimate it.
Test yourself
Can you name the five things GDP leaves out or misses?