Free Essay

Non Market Production

In: Business and Management

Submitted By gstvslzr
Words 436
Pages 2
Non-Market Production

The non-market production occurs mostly in times of financial crisis or as a way for individual to evade certain governmental controls. This kind of market also suffers a significant increase when needed goods are scarce and the internal production can’t satisfy the demand. Countries that experience high demand of basic necessity goods and low production of these goods are more likely to develop a strong and out-of-control non-market production market, also known as black market. This kind of market is not reflected in the GDP because it can’t be controlled or audited by the government. The NPM (non-production market) also refers to services based on cash flow, illegal substances and contrabands, illegal money exchanges, etc.
One perfect example of this kind of market is founded in my native country Venezuela, where basic necessity products like milk, eggs, chicken, sugar, flower, toilette paper, and medicine can’t be found easily. A parallel market developed and now people are paying more than 4,000% of its regulated price. The dollar exchange in this country can be used as an example; in which the government set the price for 6.35Bf per dollar (03/19/2015. Source: http://themoneyconverter.com/USD/VEF.aspx) but it can’t be bought through regular channels. In consequence, the dollar’s exchange price increased to an impressive 283.41Bf per dollar or 4,463% of the official price (Source: http://dollar.nu/paralelo-en.php).
One can’t but wonder why Venezuela is such a financial situation, with an annualized inflation of 63% and 98% on the consumer’s products, and a -26.7% GDP Growth Rate (Source: see Reference). One reason is that Venezuelan government does not fear God, or there are any God fearing officials. A nation that is not founded on biblical principles and look for God good grace and wisdom to govern its people will fail miserably as Proverb 29:2 say “When the righteous rules, people rejoice; but when the wicked rules the people groan.” We, in the USA must be careful not to follow bad policies concerning our economy and learn the lesson of good stewardship and government accountability.
References:
Short On Dollars, Venezuela Tries To Halt Black-Market Trading. March 24, 2014. http://www.npr.org/blogs/parallels/2014/03/24/293874845/short-on-dollars-venezuela-tries-to-halt-black-market-trading
Trading Economic Indicator, 1960-2015: http://www.tradingeconomics.com/venezuela/indicators
Trading Economic GDP, 1960-2015: http://www.tradingeconomics.com/venezuela/gdp
The Money Converter: http://themoneyconverter.com/USD/VEF.aspx
The Holy Bible ESV: Xiphos Devepment Team Copyright 2000-2011

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