Neoliberalism stated that free markets had more stability than Keynesianism described, because the risks in market can be predicted in advance and prices will always objectively reflect possibilities. However, Keynesianism believed that government intervention will stable the economy. According to this article, the author agrees that Keynesianism is better than neoliberalism in spite of some weaknesses. I am convinced by her claim that government intervention will more stable than free market and government intervention have some serious shortcomings that the government will pursuit of individual self-interest through political which will opposite to free market, however, government intervention still have advantages when market failure.
In …show more content…
When people devote to consume, the price of goods will increase, then the currency will have inflation in the market. For instance, in China’s government intervening economy, where government uses diverse tools to affect asset prices, but uncertainty should be theoretically avoided. Furthermore, Marx believed that government intervention can shutoff crises for the reason that controlled economies are better than free-market. However, in practice, that does not seem to be this case. The domestic stock market increased drastically over the last year which is over the levels of country’s economic fundamentals. The recent stock market swooped represented that stock prices have become unattainable. Yet the Chinese government has kept intervention. The measure seemed to stop the profound disruption of the Shanghai stock market. But the influence was only temporary; on August 24, the market price still fell, which was a largest drop since 2007. The negative effect of China’s long-term interventionist approach may be more severe than the decreasing of the stock market. Very few people would like to invest in a market that the government can change the policies all the times. Recent events pressurize China’s leaders to revalue what they control the economy. If they insist their decision and continue to keep the current price system, they will be hard to build a stable …show more content…
However, free market will promote the economic efficiency and develop the productivities, and ignore the homogeneous social distribution. For instance, America’s uneven education system, which quality is connected with income levels, is an obvious inequality. This reflects both a public investment deficiency and an asymmetric information. Improving heterogeneous distributional outcomes will inevitably involve either government intervention or certain incentives. For example, setting up minimum wage, unemployment insurance and tax system to eliminate the unequal distribution. If demand for labor is fixed, when government imposes an effective minimum wage, the imposition of an effective minimum wage creates unemployment without reduces the level of employment. In some countries, restraint on income and wage growth seems to have been significant to recovering competitiveness and incenting potential outputs. Furthermore, government protects domestic tradable industries from external competition in a relatively open global economy, which gets large aggregate benefits. Therefore, they will influence the efficiency and adaptability of the economy.
In the conclusion, from the article, I should critically consider government intervention. So, I agree with the author that government intervention has a certain advantages to some extents, but it also has some faults. When government intervene the economy, people will reach
In …show more content…
When people devote to consume, the price of goods will increase, then the currency will have inflation in the market. For instance, in China’s government intervening economy, where government uses diverse tools to affect asset prices, but uncertainty should be theoretically avoided. Furthermore, Marx believed that government intervention can shutoff crises for the reason that controlled economies are better than free-market. However, in practice, that does not seem to be this case. The domestic stock market increased drastically over the last year which is over the levels of country’s economic fundamentals. The recent stock market swooped represented that stock prices have become unattainable. Yet the Chinese government has kept intervention. The measure seemed to stop the profound disruption of the Shanghai stock market. But the influence was only temporary; on August 24, the market price still fell, which was a largest drop since 2007. The negative effect of China’s long-term interventionist approach may be more severe than the decreasing of the stock market. Very few people would like to invest in a market that the government can change the policies all the times. Recent events pressurize China’s leaders to revalue what they control the economy. If they insist their decision and continue to keep the current price system, they will be hard to build a stable …show more content…
However, free market will promote the economic efficiency and develop the productivities, and ignore the homogeneous social distribution. For instance, America’s uneven education system, which quality is connected with income levels, is an obvious inequality. This reflects both a public investment deficiency and an asymmetric information. Improving heterogeneous distributional outcomes will inevitably involve either government intervention or certain incentives. For example, setting up minimum wage, unemployment insurance and tax system to eliminate the unequal distribution. If demand for labor is fixed, when government imposes an effective minimum wage, the imposition of an effective minimum wage creates unemployment without reduces the level of employment. In some countries, restraint on income and wage growth seems to have been significant to recovering competitiveness and incenting potential outputs. Furthermore, government protects domestic tradable industries from external competition in a relatively open global economy, which gets large aggregate benefits. Therefore, they will influence the efficiency and adaptability of the economy.
In the conclusion, from the article, I should critically consider government intervention. So, I agree with the author that government intervention has a certain advantages to some extents, but it also has some faults. When government intervene the economy, people will reach