market economy

noun

|Updated on: 30 May 2018

Definition of market economy

: an economy in which most goods and services are produced and distributed through free markets

See market economy defined for English-language learners

Recent Examples of market economy from the Web

After prison, Prigozhin and his stepfather took advantage of Russia’s nascent market economy following the collapse of the Soviet Union and opened hot dog stands.

— Washington Post, "Russian indicted by US seen as doing favors for Putin," 22 Feb. 2018
China also asked that America recognise it as a market economy at the World Trade Organisation, lessening the scope for punishment in trade disputes.

— The Economist, "Trade talks expose a chasm between China and America," 5 May 2018
In a real market economy, an avid defender of socialism will always have the possibility of finding donors, investors and readers to finance the dissemination of his opinions.

— kevin brookes, WSJ, "Freer Markets, Freer Media," 1 May 2018
Restoring a market economy took priority over human rights and social justice.

— patrick iber, The New Republic, "How neoliberalism shapes the global economy and limits the power of democracies," 23 Apr. 2018
In 1968, the Democratic Party was unequivocally committed to the notion that the federal government had a responsibility to eradicate poverty through interventions in the market economy.

— eric levitz, Daily Intelligencer, "50 Years After His Assassination, We Are No Closer to Realizing MLK’s Most Radical Dream," 4 Apr. 2018
Many of them are convinced that Russia needs democracy, market economy, freedom of speech, fair elections and good relations with the West.

— mikhail zygar, Time, "Putin Believes He's Destined to Make Russia Great Again. And He's Just Getting Started," 19 Mar. 2018
Her New Majority coalition, which includes the Communist Party, set out to destroy the pillars of the market economy.

— mary anastasia o’grady, WSJ, "Fast Chilean Growth Can Happen Again," 11 Mar. 2018
Putin has nurtured an image as the man who brought the country from crisis after the humiliating collapse of the Soviet Union in 1991 and a chaotic transition to a market economy.

— nathan hodge, CNN, "Will Vladimir Putin ever release his grip on Russia?," 18 Mar. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'market economy.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of market economy

1929

in the meaning defined above

See Words from the same year

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Financial Definition of MARKET ECONOMY

market economy

noun

What It Is

A market economy is structured to allow market forces to determine prices with little or no government involvement.

How It Works

In theory, a market economy's functions are based on fluctuations in supply and demand for specific goods and services across an entire market. This relationship results in market prices that efficiently distribute goods and services among market participants who are willing and able to pay for them. Regulations by government are theoretically unnecessary, since market forces shift supply and demand and signal price adjustments conducive for efficient exchange of goods and services. Capitalism in its purest form exists in a market economy.

Why It Matters

Most developed industrial economies are a hybrid of market economies and government oversight. Fiscal and economic policies are implemented to protect the less fortunate and sustain overall well-being, include minimum wage laws, social insurance programs and subsidized health care.

Source: Investing Answers