open economy

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Open Economy

An economy in which participants are permitted to buy and sell goods and services with other countries. The GDP of open economies includes exports (which add to GDP) and imports (which subtract). Some very open economies have few or no trade restrictions such as tariffs, but this is rare in practice. Nearly every economy in the world is an open economy to a greater or lesser extent.

open economy

an economy that is heavily dependent on INTERNATIONAL TRADE, EXPORTS and IMPORTS being large in relation to the size of that economy's NATIONAL INCOME. For such economies, analysis of the CIRCULAR FLOW OF NATIONAL INCOME must allow for the influence of exports and imports. Compare CLOSED ECONOMY.
References in periodicals archive ?
Open economies are typically exposed to different sources of shocks than economies relatively closed to international trade (1): To the extent that a country trades goods with the rest of the world, economic conditions in its trade partners and changes in international relative prices may affect domestic economic activity.
Under imperfect credibility, the role of communication increases significantly in both closed and small open economies. Moreover, a new inflation target should be implemented gradually: the reduction must be sharp at first and slow afterwards.
New Delhi: India has all three factors of democracy, demography and demand adding that India is one of the most open economies in the world.
Mrs May also stressed that a comprehensive Brexit trade deal with the EU will help underpin a shared commitment to open economies and free societies as Moscow seeks to undermine Western values.
Contrary to the political rhetoric, experts said migrants from emerging economies have helped their host economies with innovative ideas that address social challenges and open economies have benefited from labour migration.
"Contrary to all the global noises we see in various parts of the world, there are no voices of protectionism in India and therefore, we have opened up in terms of our economy and today we are amongst the most open economies in the world," he said.
The Prime Minister also said that India has been transformed into one of the most open economies in the world with a strong growth rate.
Ireland is especially exposed due to the legacy of high public and private sector debt levels, the sensitivity of small, highly open economies to international shocks, and Brexit-related vulnerabilities.'
Bank of Korea (BOK) Governor Lee Ju-yeol said Tuesday that central banks of small open economies need to pay more attention to financial stability when they implement monetary policies, as they are vulnerable to capital outflows and currency depreciation.
We start by discussing general equilibrium conditions in Section III.A, and proceed by discussing the equilibria in closed and open economies in Sections III.B and III.C, respectively.
Eighteen chapters are divided into eight parts: introduction; how markets work; the data of macroeconomics; the real economy in the long run; money and prices in the long run; the macroeconomics of open economies; short-run economic fluctuations; final thoughts.
As a result of that trade agreement with Canada and the United States of America, Mexico today is one of the most open economies in the world as well as a leading exporter.