Types of Economies

The relationship between the government of a country and its economy is referred to as its political economy.

Typically, there are two “extremes” to this:

1. Laissez-faire economy- an economy in which there is little to not economic regulation; minimal government intervention in markets.

1. This is typically associated with more capitalist societies

2. Command Economy- an economy in which the government controls everything; there is heavy regulation and the government usually runs most (if not all) industries

1. This is typically associated with more socialist societies