Dear Revaz Lordkipanidze,
Open economy usually operates under specific conditions of international competition. As part of this competition, individual open economies, conducting mutual trade, capital and finance, specialize in the production of export goods as part of a better comparative advantage. For several dozen years, this degree of openness to international trade and capital flows has been growing in most countries. These processes are correlated with the advancing economic and informational globalization. From the beginning of the development of economics, that is, from the formation of the trend of classical economics, theories are being suggested suggesting improvement in the economic growth of countries that actively develop trade exchange with other countries. International competition is therefore a particularly important factor in the development of trade, capital and finance.
Best wishes
OPEN ECONOMY means the functions of the economy is dictated by the market mechanism, i.e. competition is allowed to flourish with minimal state interference or market friction. With the advent of globalization today, we are mislead to believe that there is such a thing as "truly" open economy.
Look around the globe, we will see that economies, in all its developmental stages from less developed to developing and developed, are regionalized into trading blocks where each blocks reserves certain privileges for its members. Trade negotiations are conducted in a bloc-to-bloc basis. Any country that stands alone and claim itself to be "open" would soon fall prey to blocs or regional hegemons: NAFTA, AEC, EU, etc. are example of these trading blocks. Tax free among members (that is open); no tax exempt for non-members (that is not free).
LINKS:
https://en.wikipedia.org/wiki/Trade_bloc
An open economy gives the fantastic benefits to the world’s economy and the whole participant, but not all openness is useful. Unfortunately, open economies often get more benefits for various adventurers, therefore, such economic relations should be controlled with special care and it is necessary to block criminal flows...
P.S. For example, an unregulated open economy and profit tax cuts on 5% points lower, than even in the Chinese regional free zones, the subsequent simplification of all taxes did not produce the desired results, because of the inexperience of the former authorities, adventurers were in better off, than the real business.
Open markets and a small state can work well, for public benefit and welfare. This would require geonomics, i.e. the taxation of economic rent.
http://www.hgsss.org/new-voices-in-economics/
https://www.researchgate.net/project/Geonomics-in-1-Lesson
An open economy is an economy in which there are economic activities between the domestic community and outside. People and even businesses can trade in goods and services with other people and businesses in the international community, and funds can flow as investments across the border. Trade can take the form of managerial exchange, technology transfers, and all kinds of goods and services. (However, certain exceptions exist that cannot be exchanged; the railway services of a country, for example, cannot be traded with another country to avail the service.
Open economy usually operates under specific conditions of international competition.
Open economy is when an economy allows freer movement of goods & services, capital, investment and labor. However, it is subject to competition. Competition shall benefit the economy. Simultaneously, it may harm (for economy who are not prepared for competition)
openness is key to success but limited openness is failure & to much openness is disaster
You can choose small open Economy for your research. Because small open economy, perfect capital mobility is often assumed. By "small" it is understood that an economy has very small share in the world markets. And its maximized the profi.
It’s my position by a “great“ work: Book Which “Open Economy” is More Useful for Competition? - Tbili...