Black markets distort official statistics from "summary" of EBOOK: Macroeconomics by Rudiger Dornbusch,Stanley Fischer,Richard Startz
When official statistics are distorted by black markets, it can lead to inaccurate assessments of a country's economy. Black markets operate outside of the legal framework, which means that transactions occurring in these markets often go unreported. As a result, the data used to calculate important economic indicators such as GDP, inflation, and unemployment may not fully capture the true economic activity taking place in the country. For example, if a significant portion of a country's economic activity is happening in the black market, it can artificially deflate the reported GDP. This can give the impression that the economy is smaller than it actually is, leading policymakers to make decisions based on incomplete information. Similarly, if prices in the black market are significantly different from those in the official market, it can distort measures of inflation, making it difficult to accurately assess the true cost of living for the average citizen. Furthermore, black markets can also impact measures of unemployment. People working in the black market may not be included in official unemployment figures, giving the impression that the labor market is healthier than it actually is. This can lead to misguided policies aimed at addressing unemployment that may not be effective in reality.- The presence of black markets can distort official statistics and paint an inaccurate picture of a country's economy. It is important for policymakers and economists to take into account the impact of black markets when analyzing economic data in order to make more informed decisions.
