closed economy


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closed economy

an economy that is not influenced by any form of INTERNATIONAL TRADE, that is, there are no EXPORTS or IMPORTS of any kind. By concentrating on a closed economy, it is possible to simplify the CIRCULAR FLOW OF NATIONAL INCOME MODEL and focus upon income and expenditure within an economy. In terms of the circular flow, AGGREGATE DEMAND in a closed economy is represented by:

By contrast, the OPEN ECONOMY allows for the influence of imports and exports and here aggregate demand is represented in the circular flow as:

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Section 2 presents the closed economy model under rational expectations.
But the further elaboration of the credit cycle theory focused on a closed economy setting (Garrison, 2006).
After all in our recent economic history we converted from being a closed economy to being an open one and in the future we will need to be open and green.
Syria has shed its image as a closed economy and is pushing to attract Gulf investment in the wake of the global financial crisis, Finance Minister Mohammad Al-Hussein has said.
The fiscal multiplier is large in Japan, helped by the fact that it is a relatively closed economy, which limits import leakages.
Korea-watchers believe he would not make major changes in the way the government deals with the rest of the world, which is to say that he would maintain its adherence to juche, or self-reliance, through closed borders and a closed economy, and would continue its nuclear brinkmanship.
Summary: India has undergone a systematic transition from a closed economy to an open economy since the beginning of economic
Instead, the Congress-led government has taken an unexpected step backwards towards a closed economy policy by almost scrapping Indian retailers' rights to create joint ventures with foreign firms.
Assuming the absence of other resources for entrepreneurs to work with in a closed economy, would an abundance of entrepreneurship alone cause an outward shift of production possibilities and an expansion of welfare?
Minsky, through its model, proposed a simplified explanation, which is especially applicable to a closed economy.
This identification scheme may be appropriate for a large and relatively closed economy such as the United States.
In the original closed economy model, current inflation is related to the expected future inflation rate and the current domestic output gap, i.