Economy: A Functional General Model

Abstract

All economies are striving to achieve their own defined goals. However a clear definition of an economy is still lacking in Economic literature though dictionaries provide us a sketchy definition. This paper attempts to provide a basic functional definition of an economy that not only points out the primary objective, the contents and the functions of the economy but also presents a holistic integrated commodity and money markets with external linkages. A causal (functional) model of an economy is presented using Half-Arrow Modeling Technique.

Keywords: Economy, General Model, Definition of Economy