Old Economy

And finance Allah shmoop What is an open versus a

closed economy Well to answer the question let's take a

little trip This is the Isle of Four Sick and

Seclusion It's way out in the ocean far from any

other country and not along any particular trade route No

ships ever come by No planes ever land The natives

subsist mostly on homegrown coconuts and specially farmed Algy Well

they've never seen a Marvel movie Sadly not even Ultron

They have never tasted Dairy Queen and it's a very

lonely very sad highland There's no trade it all with

the outside world no exports no imports to say it

another way It's a closed economy Alright moving elsewhere in

the world we come to the United States of America

It's the centre of global commerce the global economic network

It trades with other countries all the time Imports and

exports are well both Hi It's an open economy Well

don't think of opening closed Economy is like a light

switch right Like lights off completely closed lights on completely

open Instead the ideas have opened and closed Described a

continuum more closed versus Mohr Open every country fall somewhere

on that spectrum The U S is relatively open but

there are closed aspects of our economy We put tariffs

on certain products We have import restrictions We have rules

about exporting things like high end military technology or data

about our high school students looking atyou Their Facebook international

banking rules also make friction an important export of capital

Well meanwhile even the most closed economies in the real

world don't get all the way to the Isle of

Forsaken seclusion situation Even economies that are considered relatively close

like say North Korea they're not completely closed They have

some trade They might import weapons from China for instance

or export tweeted threats to South Korea You could argue

that Earth as a whole is a closed economy After

all We have yet to set up any trade routes

with Martians at least not yet Keep watching the skies

though People work trying But even the idea of the

Earth as a closed economy has some holes in it

Things like the gold and uranium we mind were probably

deposited by meaty yours Meanwhile we import energy and light

from the sun and we export radio signals An old

space junk somewhere in the cosmos there might be a

giant space crab using a Voyager probe as its shell

And it's probably only a matter of time before we

start receiving signals from some space monster version of Netflix

emanating from the Vega system You know way out there

Can't wait to see how their reboot of House of

cards turns out to Some closed economies are ones that

lack outside foreign trade They can become self sufficient But

it can also mean significant scarcity If the forlorn islanders

suffer a bad algae harvest well they can't just import

food Suddenly from another country It can lead to rationing

or a mass starvation Open economies include a lot of

foreign trade high levels of imports high levels of exports

In the real world no economy is ever completely open

or completely closed And outside of the Isle of Forsaken

seclusion it's hard for an economy to be completely closed

ever Instead everything falls on the spectrum somewhere between more

open and more clothes Economies like North Korea are skewed

toward the close side Economies like the U S Air

skewed toward the open side And as for those forsaken

islanders Well give them a little time the global markets

bound to find him Eventually they'll be selling their algae

products to hipster vegans through Amazon and delivering high protein

forsaken coconuts via drone having crew prepare for take off