Definitely... Covid has created a new reality. The sudden change has opened new markets and different ways of operation. Hence parallel markets are bound to surge inevitably.

Of course: yes!!

Sure .. Very clear in the pharmaceutical market.

I think yes.

Covid has created a new dimension to the market, new approach to run business despite the virus outbreak. Most organizations employed the work from home process which gives the organization more working hours for employees and they spend less on office resources and equipment which invariably will boost the profit and the economy In the process.

Sure,! Firts, it is the "baloon effect": once the policy restrain licit trading, trading moves into the black market. Then there are liquidity constraint which can be betteer alleviated by the deep pocket of organized crime rather than by the licit credit sysytem,. Then, the unemployed can turn thier occupatin into crime or smuggling. Then, it a long list ...

Probably yes. Historical experience shows an increase in the shadow economy during periods of crisis.

It is difficult to formulate one view, an international approach to this issue, or universal conclusions on this issue. In individual countries, before the SARS-CoV-2 (Covid-19) pandemic, the scale of the development of the shadow economy was very diverse, both in terms of the scale of development, structure in terms of branches and sectors of the economy, correlation with specific economic processes, etc., as well as in the question of the correlation of the scale of the shadow economy development with specific determinants, regulations, fiscal systems, etc. of individual countries. On the other hand, the SARS-CoV-2 (Covid-19) coronavirus pandemic may favor the development of the shadow economy in certain areas, industries and sectors of the economy, in certain types of economic activity. An example is the practice of extorting government subsidies, which are granted to certain types of companies and enterprises, certain types of economic activities that have been in an economic crisis due to the pandemic, and / or economic entities that have been subject to a lockdown. The scale of this type of shadow economy may vary greatly from country to country. It is determined, inter alia, by the level of organization and efficiency of the subsidy control system.

Best regards,

Dariusz Prokopowicz

Yes, in my personal experience, the lockdown created new entrepreneurs. They are of course unregistered and below the radar of government. These new entrepreneur usually deal with food products, either as producers or traders servicing the community where they belong.

The scenario that was formed/is forming, starting with COVID-19, implies many changes in many economic sectors in the world, especially in developing countries. An interesting research topic, among so many others, that allies with this reality are frugal innovation.

The collapse of world economies is a stark reality, but people must produce, they must keep moving, which is why the economy in gray, I estimate will grow as much as frugal innovations to reach the market. From there a new breed of entrepreneurs will come out, purified by the market sieve.

Mamia Tetvadze

please check the pdf

Dear Hermann Gruenwald,

Thank you very much for your kind assessment, review of my answer.

Best regards,

Dariusz Prokopowicz

Dear Mamia Tetvadze, thank you for this question. It seems to me that, in fact, every economic crisis is conducive to companies fleeing into the shadow economy. In this way, some firms "amortize" some unexpected costs and market failures. However, what we observe during the pandemic and what mass media news programs have communicated to us in recent months is very disturbing in connection with the already published reports of specialist agencies on the "gray" and "black" markets in the last year 2020. I enclose a link to a professional publication " CipherTrace's 2020 Cryptocurrency Crime and Anti-Money Laundering Report ". https://ciphertrace.com/2020-year-end-cryptocurrency-crime-and-anti-money-laundering-report/

In my opinion, the pandemic greatly accelerated the development of digital crime through the Internet and GSM mobile phone, which we needed in the circumstances of isolation and confinement at home. Frauds from state aid created very quickly by officials to meet the needs of the moment are still reported, and there was probably no time for officials to develop procedures to prevent criminal activity. We are also informed in the media on various tricks of bypassing the bans of state authorities by rebellious restaurateurs, sports clubs, discos, beauty salons and spas, and many other service companies that should be formally closed, and are not, thanks to "clever" lawyers finding loopholes in the law and understatement in order to bypass the bans and orders created very hastily in the conditions of the progressing plague. So yes, this time of covid-19 is a breeding ground for sophisticated crime using digital technologies such as cryptocurrencies, but also the traditional technique of "legal loops". However, the scale of this phenomenon will be known after many years, when specialists explore this topic as much as possible.

Best regards

I think that the pandemy opened door to the shadow economy in many layers. Probable the lowest one are barbers or shawers etc. that were closed or now can work under conditions that are unacceptable for many people or, in other worde, a great part of population is marginalized to similar position like Jews in Nazis Germany.... But these peaple need services... The illegal ways are the only solution. The higher level shadoe economy are obscure producers of goods that normally are uncessary, but now they buing and using is complusory forced. Tey represent an abnormality that is "normalized". The shadow economy becomes a leading economic forrce, while existence on many others from the legal economy is liquidated. There is also a great problem of pharmaceutic industry and its expansion...This is a new reality of the new "covidist dictature...."

It depends on the restrictions adopted under the covid-correlated panic. In some cases, there restrictions moved the now-illit supply in the black market: the "balloon effect" which is very knowkn in the illicit substances literature. But, in some case the restrictions were so deep to affect the black market tooo. In the case of the italian illict cannabis market, the adopted restrictions severly harmed this market, in particular the cannabis social supply.

The recent most development in Prague shows, how the shadow economy connected with the pandemy penetrates into official structures. Some months ago a higly disputable consulting board of goverment had been established. It enforced the extremely restrictive measures damaging the normal live and, in particular, it stopped all schools for many months. Some speeches of its representatives manifested even the sadistic features. Today it was officialy liqudated. The strongest protest against its liquidation was addresed by the education minister Plaga, a man, who only two days ago declared, that during the whole school year 2021/2022 all pupils will be tested each week and bill not be allowed to lived without the respirators. Please imagine this enormous busines and profite of some firms. I will not discuse the real impact of this measure on tthe psychical and physical damages of the childerns.... in the name of busines of somebody, there is introduced a regime higly similar with the nazis concentration camps.

I agree that the level of the shadow economy has been and has changed differently in different countries. The spread of the pandemic and the complication of the conditions of economic activity formed due to the introduction of forced restrictive measures, led to an increase shadow economy in Ukraine. According to the calculations of the Ministry of Economy, the level of the shadow in January-September 2020 amounted to 31% of official GDP, which is 3 percentage points more than indicator of January-September 2019.

In general, the growth of the shadow economy was expected. Restrictions have been introduced measures to protect the population from biological hazards had their consequences reduction of business activity (both inside and outside the country) and, accordingly, significant increase in losses in the economy. Under such conditions, the desire of business to reduce the risks of losing resources in conditions of high uncertainty are natural.

At the same time, there is an increase in the level of the shadow economy in the first 9 months of 2020 lower compared to the growth of its level as a result of previous crisis periods (in particular, the crisis of 2014). This indicates, first, the special nature and character coronary crises, not similar to the crises of previous periods; secondly, about the limited opportunities for the new nature of the crisis (primarily, the oppressed social activity) to expand shadow operations.

Best wishes, Iryna Kondrat

Yes, I think so. Under the widespread of Covid pandemic, governments have imposed stricter regulations on labour, movement, goods and service markets, and these stricter regulations may encourage businesses and laborers shift to the shadow economy.