Unrecorded Economy Law and Legal Definition

An unrecorded economy refers to an economy that is engaged in those economic activities that circumvent the reporting requirements of government statistical agencies.

An unrecorded economy can be recognized by measuring the amount of unrecorded income that should be recorded in national accounting systems but is not recorded. Transition countries that are switched from a socialist accounting system to the western norms of National Income and Product Accounts faces the problem of unrecorded income.