Development of an economic situation last 20 years has passed in Latvia through various stages. Including - Post-Soviet re-structuring of demand and closing of industrial giants; development of the economy based on transit; development of craft manufacture, small enterprises and branch of services (after joining to EU) and their decline because of transition to the system focused for export of a manpower. In 2009 the following stage of economic development became swept up. Latvia has not sufficed resources for a survival, financing from outside the international community has been requested. Unfortunately, any of the mentioned models is not necessary for the developed countries, therefore it is possible to draw a conclusion that the Latvian economy still is in process of transformation. It is necessary to define possible directions of the further development. In Latvia to estimate economy development, the model of system dynamics which quantitatively analyzes macroeconomic balance is developed. Considering a theme urgency, article purpose - to reflect the developed model. For purpose achievement following problems are put forward: • to reflect model structure, to show its forming blocks; • to prove economic interrelations and assumptions which are accepted in model; • to show model application on an example of separate economic indicators. The model presented in article, has been developed with use of a method of system dynamics. The method is chosen taking into account difficult interaction between macroeconomic processes. It is a unique quantitative method which allows to estimate not only plural causally - investigatory communications, but also their return interaction. Macroeconomic balance is based on feedback in this connection for its analysis, during the long-term period, it is recommended to use a method of system dynamics.