market economy


Definition of market economy 

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

Examples of market economy in a Sentence

Recent Examples on the Web

Hard to believe now, but Russia’s leadership wanted to use shock therapy after the collapse of the Soviet Union to create a market economy and align closely with the West. Jon Talton, The Seattle Times, "‘It’s the economy, stupid,’ and the bad luck of George H.W. Bush," 4 Dec. 2018 Image Should a deal emerge from the Trump-Kim meeting on June 12 in Singapore, China is ready to extend its dominance over the North’s small and decrepit economy, where signs of an emerging market economy are also strengthening China’s hand. Jane Perlez, New York Times, "A Trump-Kim Deal Could Send China’s Trade With North Korea Soaring," 5 June 2018 The dollar’s recent rise has showed signs of stalling, relieving some of the pressure on emerging-market economies and multinational corporations. Amrith Ramkumar, WSJ, "U.S. Stocks Take the Global Lead," 16 Sep. 2018 Denmark has quite a free-market economy, apart from its welfare state transfers and high government consumption. Matthew Yglesias, Vox, "Kevin Williamson’s unhinged attack on Elizabeth Warren’s corporate accountability bill, explained," 17 Aug. 2018 Peter Altmaier, the new business minister, has said that priority will be given to strengthening the social market economy and to economic development in the former east. The Economist, "Ceçi n’est pas un hype!Germany may be rich, but inequalities are widening," 12 Apr. 2018 Throughout the 1980s and 1990s, the U.S. Treasury provided more than$100 billion in loans to dozens of developing and emerging market economies. Daniel Mcdowell, Washington Post, "Beijing is taking on a broader financial role. Here’s why that matters.," 14 June 2018 Since the days of the Nixon administration nearly 50 years ago, American policy has aimed to steer China out of its isolation to prosper in the global market economy. Eduardo Porter, New York Times, "Trump’s China Policy Has a Flaw: It Makes China the Winner," 27 Mar. 2018 For 50 years Hong Kong could keep its independent courts, its free-market economy and its freewheeling press, while Beijing was responsible for matters of state like national defense and foreign relations. Austin Ramzy, New York Times, "Hong Kong Gives Mainland Police Sway in New Train Station," 15 June 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.

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First Known Use of market economy

1929, in the meaning defined above

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Statistics for market economy

Last Updated

26 Dec 2018

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The first known use of market economy was in 1929

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More Definitions for market economy

market economy


Financial Definition of market economy

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

market economy


English Language Learners Definition of market economy

: an economic system in which prices are based on competition among private businesses and not controlled by a government

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