Unitary Economic Entities: A Theoretical Framework for Economic Analysis and Measurement

Abstract

This paper introduces the concept of Unitary Economic Entities (UEE) as a formal analytical framework for understanding, modelling, and measuring economic processes at their most elementary level. UEE are defined as the smallest indivisible units of economic activity, each characterised by an input, an activity, an output, and a consumption. The framework provides a bridge between micro-process modelling and macro-level economic interpretation. It extends classical production theory by introducing an atomic structure of activity, allowing efficiency and transformation intensity to be measured at unprecedented granularity. The paper develops the mathematical structure of UEE, discusses hierarchical composition, and demonstrates applicability through an illustrative production example. It argues that UEE can serve as a universal analytical foundation for empirical research, process management, and economic system modelling.