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the economy


Though the size of the black economy or the underground economy has now become significant in many countries, it has not spawned commensurate development of the literature to study the black economy within a macro model. This book examines the macro aspects of black economy in an open economy macro framework to study the inter-linkages between the white and the black economy in the context of stabilization policy in India. After defining black economy and black incomes, the book goes into details to understand the nature of black economy in India. In order to understand how the conventional macro analysis needs to be reviewed in the presence of black economy, it examines the validity of the concept of ‘twin deficit’ and reformulation of the three gap model with implications for data gap. The monetary aspects of the Indian economy have also been discussed with the objective of showing how the various issues for the sake of completeness, like the income velocity of money circulation, the money multiplier, the role of credit,fiscal deficit, expenditure multiplier, growth, etc.

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