The Economic Role of Government

Vani Borooah

Chapter 13 in Growth, Unemployment, Distribution and Government, 1996, pp 117-123 from Palgrave Macmillan

Abstract: Abstract Much of economic theory of the textbook variety is a celebration of the free market system. This celebration has two parts. First, the operation of the price system, in the context of competitive markets, leads to a balance between the demand and supply of the different goods and services traded. In other words, flexible prices results in competitive market clearing. Second, the market-clearing equilibrium – brought about through flexible prices and competitive markets – is a ‘good thing’ in the sense that it is also a point of economic efficiency.1 In other words, competitive outcomes are also efficient ones.2

Keywords: Public Good; Competitive Market; Market Failure; Efficient Outcome; Liberal Democratic Party (search for similar items in EconPapers)
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-37300-6_13

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DOI: 10.1057/9780230373006_13

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