This type of economy plays a major role in many countries. People evade taxes and regulations by working or by employing people illegally. On the one hand, this unregulated economic activity can result in reduced tax revenue and public goods and services, lower tax morale and less tax compliance, higher control costs, and lower economic growth rates. But on the other hand, this type of economy can be a powerful force for advancing institutional change and can boost the overall production of goods and services in the economy. What economy can be described like this?
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