GREY ECONOMY

noun Written gray economy in the US (Business World) In financial jargon, the consumption, income, earnings, etc. generated by or relating to commercial activity which is unaccounted for in official statistics. Etymology: Formed by applying the grey of grey market to the economy as a whole (see below); a lesser version of the black economy. History and Usage: The term grey economy first appeared in the early eighties; the term grey market from which it derives can be traced back to post-war America, where it described the unscrupulous selling of scarce or rationed goods at inflated prices (a lesser black market). As the phrase grey economy became established its meaning was extended to cover any unorthodox or unofficial trading which is conducted in the wide grey area between official indicators of economic growth and the black market. In specific applications the term has been used with reference to any unwaged but significant activity (such as housework); to the earnings of those who 'moonlight' by taking a second job, often under an assumed name; to the makeshift system of bartering, exchange of goods, etc. which co-exists with the State economy, especially in the countries of the old Eastern bloc; and to the growing practice among small independent retailers in Britain of importing a product direct from its manufacturer or a foreign supplier in order to retail it at a price lower than that of its official distributor. The steady emergence of this last phenomenon during the eighties is in part explained by the strong encouragement given to small businesses in the enterprise culture. Street vendors...have sprouted lately as an above-ground grey economy. Their goods--clothes, watches, jewellery--are not stolen, but bought wholesale. Economist 2 Apr. 1983, p. 70 Italy, too, has a thriving entrepreneurial sector, but it is largely part of the 'gray' economy and so does not appear in the figures of tax collectors or government statisticians. Harvard Business Review Jan.-Feb. 1984, p. 60