Reading List: Markets don’t fail

24th January 2012

Capital Controls are Not Beggar thy Neighbor

Kevin P. Gallagher says capital controls are not protectionist – quite the opposite: "unstable capital flows to emerging markets can be viewed as negative externalities on recipient countries. Therefore regulations on cross-border capital flows are tools to correct for market failures that can make markets work better and enhance growth, not worsen it." Financial Times

 

Yet More ‘Free Market' Double Standards

"It has gotten to the point where I think ‘free market' proponents will advocate anything, so long as you frame it to be opposed to the state/Keynes/Marx." Example: the fact that regulators can be captured means we shouldn't use them. Similar arguments don't apply with police and corruption, however. Unlearning Economics

 

The debtors' merry-go-round

This interactive overview of comparative debt shows levels of debt as a % of GDP for a selection of rich countries and emerging markets. According to Research by the McKinsey Global Institute, the process of deleveraging may take more than a decade. The Economist

 

American Political Myths – The "Invisible Hand"

David Desautel puts up a staunch defensive of state intervention in the face of free market advocates and anti-government zealots (his words not mine). "Lemon laws, false advertising laws, safety inspections of food products, usury laws, and laws preventing the defrauding of customers are ALL government interventions in business and commerce." The Reverse Spin

 

Markets don't fail

Are markets under assault? So thinks Jan Boucek: "markets don't "fail." They respond rationally, quickly and often brutally to conditions as they find them. If they see a shortage of supply or an excess of demand, they'll drive prices higher. Conversely, excess supply or falling demand drives prices lower." Adam Smith

 

Got any other suggestions for what we should be reading? Tell us below? 

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