From the Perfect Economy to the Predatory State: The Internal Logic of Distortions

Hans C. Blomqvist and Mats Lundahl

Chapter 14 in The Distorted Economy, 2002, pp 243-247 from Palgrave Macmillan

Abstract: Abstract A central thesis in modern economics is that the market system automatically produces the optimal allocation of resources provided that there is perfect competition in all markets. This was also the starting point of the present book. The purpose of the book was to show how it then comes that the theoretical ideal usually in reality is replaced by a system full of distortions — often initiated by economic policy — and which welfare effects this leads to. The theoretical instrument consistently employed in the book is a simple neoclassical model of the general equilibrium type.

Keywords: Resource Allocation; Factor Price; Internal Logic; Perfect Competition; Pareto Optimal Allocation (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-4039-1434-7_14

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DOI: 10.1057/9781403914347_14

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