A traditional economy is an economic system where customs, traditions and beliefs determine the goods and services created by the society. It is dependent on agriculture, hunting and gathering, fishing or any combination of the above. Also called a subsistence economy, it may involve use of barter trade instead of currency.Know More
A traditional economy is usually underdeveloped with minimal economic growth. It is often dominant in rural and farm-based countries. Limited surplus is produced, and excess goods are usually given to the ruling authority or landowner.
Typical examples of traditional economies as of 2014 are the Inuit or those of the South India tea plantations. This type of economic system is considered “primitive” or “undeveloped,” having technologies or tools perceived as outdated. People living in such an economy are regarded as living in poverty, even if their daily needs are satisfied. However, traditional economies are usually less environmentally destructive than sophisticated ones may be.
Traditional economies are popular in emerging markets or developing world countries. For instance, they can be found in parts of Africa, Asia, the Middle East and Latin America. Some forms of traditional economies, however, are present virtually all over the world. Traditional economic systems are expected to eventually evolve into a mixed, market or command economies.Learn more about Economics
Advantages of a traditional economy include knowing people's role in the economy and producing goods to help people survive; disadvantages include a lower standard of living and an increased vulnerability of all concerned. A traditional economy is one that emphasizes the beliefs and customs of each generation of people.Full Answer >
A closed economy refers to an economic system which does not have business relations with any economies outside its own system. Closed economies employ barriers to the trade of goods and services, monies and intellectual property to and from their economic system.Full Answer >
The bartering of hunted prey used by the Inuit tribes in northern Canada is an example of a traditional economy. So too is the economy of the Sami reindeer herders in northern Scandinavia. Both rely on traditional subsistence techniques as the driving force behind their economic activity.Full Answer >
A private enterprise economy is an economic system where the means of production and distribution are owned by the private sector, which carries business for profit-making reasons. This economic system is driven by innovation, with the government placing few restrictions on business enterprises.Full Answer >