A Theoretical Framework of Mixed Systems

Michihiro Ohyama
Additional contact information
Michihiro Ohyama: Keio University

Chapter Chapter 12 in Macroeconomics, Trade, and Social Welfare, 2016, pp 209-226 from Springer

Abstract: Abstract The fundamental theorems of welfare economics prove under stringent conditions that the free market mechanism leads to the efficient allocation of economic resources. It is highly regarded as a theoretical underpinning of the “invisible hand” (Adam Smith), but generally inapplicable to the real economies in modern societies where externalities abound that cannot be addressed by the market mechanism. First, social needs for public goods are increasing in the face of rapid industrialization and urbanization. They call for construction and maintenance of stronger industrial infrastructure and further improvement of environmental and educational facilities. Second, governments are often required to employ taxes and subsidies to alleviate pollution, congestion, and depletion of natural resources stemming from Marshallian externalities interacted among a large number of citizens. The purpose of this chapter is to provide a comprehensive theoretical framework for mixed economies facing the problems of externalities and public goods.

Keywords: Public Good; Aggregate Demand; Private Good; Aggregate Supply; Mixed Economy (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:advchp:978-4-431-55807-1_12

Ordering information: This item can be ordered from
http://www.springer.com/9784431558071

DOI: 10.1007/978-4-431-55807-1_12

Access Statistics for this chapter

More chapters in Advances in Japanese Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().