Market Failure and Government Actions

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Market Failure and Government Actions

“Markets, broad and deep”

The Economist, Nov, 2012

Introduction

It has been observed that economists have a love for free trade since their interest for it often seems to puzzle the outsiders. This could be because of the reality that “comparative advantage” is not the most spontaneous idea at first thought. Or it can also be the result of regular emphasis of economists on a moderately tapered view of the gains that can be collected from the trade. Even though the efficiency that is gained from the specialization is very important, but they are simply accountable for the static increase in the output. In this trade also have a part in growth because it expands the market size trade by encouraging the development of new ways, new goods and new ideas of performing things. There are complicated that in large countries where lots of people are living trade has been observed in playing comparatively small economical roles. For example: trade can be a harder task in the United States as compare to the Ireland's.

In this article it has been seen that there are many authors discussing the size of the market and the trade that is related to it. because over here trade is not the important but the size of the market size is because when the size of the market is seen to be expanding and becoming more populated the trade becomes more wider and areas for specialization with in the trade expands, even if the extended markets cross the political borders or not. All these arguments are made in order to reflect the model of the economy supporting free trade but it has the capability of making even more sense if it would use related to ...