January 10th, 2018
To what extent can markets function effectively without the state?
The efficient market hypothesis argues that the the market is a true reflection of an entity’s state of affairs since the market is able to integrate all the information about a company on a company’s share prices. similarly, a classical perspective argues that markets are self-correcting based on the laws of demand and supply and thus the ‘invisible hand of the market’ can act to correct aspects such as recessions, inflation, and low employment levels. Based on this view, government involvement in the market through aspects such as monetary policy and fiscal policy initiatives is thought to be counterproductive. In this paper, a discussion on the extent to which markets function effectively without state interference is presented. Get a custom paper on this topic by ordering below.