Market Failures and Public Policy

Economists Must Participate in the Policy Debate.

8 mins
What is it about?


Nobel Prize

The American Economic Review (Journal)

Economists have long praised the virtues of markets. The story goes: unfettered competition protects consumers from the political influence of lobbies and forces producers to deliver products and services at cost. Yet, competition is rarely perfect, markets fail, and market power—the firms’ ability to raise price substantially above cost or to offer low quality—must be kept in check.