A main characteristic of a traditional economy is its basis in fishing, hunting, gathering and agriculture. Other characteristics of a traditional economy are its guidance by traditions and its use of bartering instead of money. Traditional economies are underdeveloped and typically see limited economic growth.Continue Reading
Usually found in rural areas or third-world countries, traditional economies include nomadic families and tribes who may move when seasons change. They often follow herds of animals that are part of their diet. Some groups may become farmers and compete with other groups for the area’s natural resources. Farmers routinely trade with other groups with which they don’t compete, such as hunters or fishermen.
Because of their basic style of living, those in a traditional economy may appear to be impoverished, even though their needs are met. People in traditional economies are guided by experiences passed down from senior members of the tribe or family, which may explain the slow economic growth in these populations.
Traditional economies are considered sustainable because they are less harmful to the environment. However, they are also at the mercy of weather changes and acts of nature, which can inhibit population growth. Traditional economies often evolve into market, mixed or command economies.Learn more about Economics