Can a closed economy flourish?
It depends on what you mean by "sustained growth" and "flourishing markets". 

Clearly the Earth as a whole is a big market. If you do not look at human made borders: the global economy is currently growing and some would say it is flourishing. There is no physical reason why this could not be done without the borders.

There are areas where the current technology cannot support the current population without outside help. An example is the heavily industrialized North Korea (which seems to motivate your question) which gets large amount of aid in food from the UN.