- 18 Mar, 2021
- 0 Comments
- 1 Min Read
Principles Of Microeconomics
The existence of a market failure often invites for government intervention in a
particular market. It is generally recommended that governments should play a
facilitating role rather than a direct role in markets. Regulatory
interventions should be limited. Appropriate interventions should have three
general aims. To improve market infrastructure, Interventions infrastructure
would target, Roads, Rail, market-facilities, water points and Health-control
infrastructures. To improve information is important for facilitating effective
marketing. To improve institutional infrastructure is the most important
government role in marketing. Government interventions should promote an open
and stable institutional framework. This can be in the form of improving
security like protecting property rights and contracts and controlling
corruption and violence. The kinds of policies that government may implement
include taxes, subsidies, wage and price controls, and regulations.
Many classical economists believe that there should be no government intervention.
The business cycle is just that. It is a cycle where the economy grows and
shrinks. Eventually it gets back in balance. Keynesian economist believe that
the economy should be regulated somewhat by the government. Growth periods
should not be too long. Recessions should be helped with policy. When the
government does intervene, the measurement of the impact of the policy is
always a little “suspect” to me. There’s never a real instant impact
and I think it’s because it is a cycle. It takes time to go thru the cycle.
What is your view and why?
Do you roll with the classical economists or the Keynesian economists?