Implications for Economists

This chapter discusses the implications of my analysis of government failure and market corrections for economists in my book Market Corrections not Government Interventions: A Path to Improve the US Economy. The main implications are that economists should broaden their perspectives to consider the potential for and cost of government failure to address a microeconomic policy issue efficiently. In addition, economists should be more receptive to the possibility that in the long run, a market correction may be a better solution to a microeconomic problem than a government intervention. Accordingly, economists should attach greater importance to government failure as well as to the potential for market corrections in the process of distinguishing between market failure and government failure, comparing market and government long-run performance, and identifying a market failure but ignoring government’s failure to address it efficiently. In future research, it would be desirable for economists to continue to provide new empirical evidence of market and government performance and attempt to provide theoretical explanations for government failure that are supported by empirical evidence. Finally, it would be desirable for economists to include extensive discussions of government and market performance in the content of their courses.