Perhaps one day earthquakes, hurricanes and financial crashes will all be predictable. But we don't have to wait until then for seismology, meteorology and economics to become sciences; they already are.
Eric MaskinRead
Many markets work best with little or no outside interference. But others - especially those subject to big 'externalities' - need a helping hand.
Interpretation
Markets can function independently, but some require external assistance to mitigate negative impacts.
In this quote, Eric Maskin emphasizes the dual nature of markets, indicating that while many operate efficiently on their own, certain markets, especially those affected by significant external factors, may struggle without intervention. This intervention is necessary to ensure fairness and to address issues that may arise from externalities, such as pollution or economic inequality, that can distort market outcomes.
In practice
Referencing this quote during a lecture on market dynamics.
Perhaps one day earthquakes, hurricanes and financial crashes will all be predictable. But we don't have to wait until then for seismology, meteorology and economics to become sciences; they already are.
What we know about the global financial crisis is that we don't know very much.
Poorly paid labor is inefficient labor, the world over.
Since 1948 I have spent every single day thinking how the economic and political worlds have changed.
If farming were to be organised like the stock market, a farmer would sell his farm in the morning when it was raining, only to buy it back in the afternoon when the sun came out.
If I care about poverty, I have to care a lot about investments in the private sector. The private sector creates the vast majority of jobs in the world, and social protection only goes so far.
A policy of subsidizing failures will end in an economy strewn with capital-guzzling industries long past their time of profitability - old companies that cannot create jobs themselves, but can stand in the way of job creation.
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