subsystemseconomy
Subsystemseconomy is a term used in discussions of systems thinking to describe economic activity bounded within a defined part of a larger system. It treats the bounded portion as a self-contained economy, with its own flows of goods, services, capital, and information, while remaining connected to other parts of the system through feedbacks and exchanges. The concept highlights how internal structure, boundaries, and inter-subsystem links shape economic outcomes in ways that may depart from aggregate macroeconomic indicators.
Boundaries for a subsystemseconomy are selected for analytical purposes and can be geographic (a city or region),
Applications of the subsystemseconomy approach include urban and regional planning, corporate strategy, and policy evaluation, where
Critiques center on definitional ambiguity and boundary sensitivity, the risk of double counting when interfacing subsystems,