This paper seeks to help reconceptualize the spaces of local and regional economies by developing the idea of the ‘compound economy’. It is set in the context of a growing body of work in geography that emphasizes the importance of culture as a factor shaping differentiated local and regional economic development and, correspondingly, as an important dynamic informing the ability of localities and regions to negotiate economic forces operating at national and supranational scales. Exploring both dominant and counter-hegemonic economic imaginaries as articulated in academic debates, we draw on the case study of Central Wales and demonstrate how these imaginaries are variously manifested in government policy discourse of the National Assembly for Wales and in the understandings and practices of business stakeholders in the region. Through comparing and contrasting these representations, we provide an empirical illustration of what, building on the work of Gibson-Graham and others, we term the ‘compound economy’, whose drivers, relations and logics are far more diverse and complex than mainstream and alternative models tend to suggest. We conclude by assessing the implications of the compound economy for both economic policy and geographical theory.