Government Intervention In Economy Research Articles

Evaluating economic interventions during the 2008 financial and 2009 H1N1 crisis in USMCA

ABSTRACT The purpose of this study is to evaluate the economic interventions of the United States, Mexico and Canada that share historical interactions within a free trade agreement (USMCA), formerly known as NAFTA, during the financial crisis of 2008–2009 using time-series analysis. First, we explain the context and dealt with USMCA. Then, the interrupted time series (ITS) methodology is applied in evaluating government economic intervention. Third, a discussion of findings is presented showing as well as how the evaluation stands next to similar studies. Finally, further research is important in evaluating government economy-based interventions for future case scenarios are suggested.

Study on the Fusibility on the Extended Government Intervention in Economy and People's Daily Lives

The Government policies and interventions for development in various sectors and issues arising out of their design and implementation. India is a developing country and has implemented growth strategies in several sectors to reinforce its economic status. There has always been a conflict between free market economy and government controlled economy. India is likely a mixture of both approaches. This study aims to know about the people’s opinion of the intervention of government in the economy and their daily lives opinion on sustainable development and government intervention. The present analysis was made through a convenient sampling method where the survey was taken from common public, professionals, etc. The sample size in the present analysis is 250. The findings were that The younger generation are more enthusiastic to start a business and prefer no or lesss government intervention or limitation in the economy or the business, this can be attributed to the views of liberalised economy and the dreams of attaining a world market space. Yet it is evident that whatever the responses on government intervention and freedom everyone agrees that sustainable growth can be achieved only by an intervening approach by the government

Stability and Bifurcations in Banks and Small Enterprises—A Three-Dimensional Continuous-Time Dynamical System

Here, we discuss a three-dimensional continuous-time Lotka–Volterra dynamical system, which describes the role of government in interactions with banks and small enterprises. In Italy, during the COVID-19 emergency, the main objective of government economic intervention was to maintain the proper operation of the bank–enterprise system. We also review the effectiveness of measures introduced in response to the COVID-19 pandemic lockdowns to avoid a further credit crunch. By applying bifurcation theory to the system, we were able to produce evidence of the existence of Hopf and zero-Hopf bifurcating periodic solutions from a saddle focus in a special region of the parameter space, and we performed a numerical analysis.

Improving the resilience of maritime supply chains: The integration of ports and inland transporters in duopoly markets

The adverse impact of the outbreak of COVID-19 has reduced ports’ operational efficiency. In addition, ports and inland logistics providers are generally independent of each other and difficult to work together, which leads to time loss. Thus, as the core player, ports can integrate with inland logistics providers to improve the efficiency and resilience of maritime supply chains. This study examines the strategic options of two competing maritime supply chains consisting of ports and inland logistics providers. We investigate the impact of cooperation between ports and inland logistics providers and government regulation on the maritime supply chain by comparing members’ optimal pricing and overall social welfare under centralized, decentralized, and hybrid scenarios. Results indicate that the hybrid scenario is an equilibrium strategy for maritime supply chain, although this strategy is not optimal for governments seeking to improve supply chain resilience and maximize social welfare. Furthermore, observations show that through government economic intervention, both seaborne supplies can be incentivized to adopt an integrated strategy, and business and society can achieve a win–win situation.

دور الحكومة في عصر التحول الرقمي (The Role of Government in the Era of Digital Transformation)

Arabic abstract: دور الحكومة في عصر التحول الرقمي الملخص شهد العالم في المنتصف الثاني من القرن الماضي ثورة صناعية ثالثة أو ثورة رقمية نتيجة التطورات الهائلة في تقنية المعلومات والاتصالات، وأجهزة الحاسب والجوالات، وقد ترتب على هذا التطور تحولا رقميا متسارعا توج فيما أصبح يعرف بالثورة الصناعية الرابعة (انترنت الاشياء، الذكاء الاصطناعي، البيانات الضخمة، سلسلة الكتل وغيرها). وقد كان لهذه التطورات تأثير واضح على الاقتصاد برمته بقطاعاته المختلفة العامة والخاصة وغير الربحية. ولهذا ظهرت خلال العقود السابقة عدة مصطلحات تصف الاقتصاد نتيجة لهذا التطور بكونه اقتصاد المعرفة، أو الإنترنت، أو الشبكات، أو التشاركي، اقتصاد الوصول، القائم على المجتمع، اقتصاد الأنداد أو التعاوني، اقتصاد المنصات، أو الرقمي، أو الافتراضي، واقتصاد الانتباه، المعلومات، وغيرها. وتهدف هذه الورقة لتقييم التأثير المتوقع لهذه التطورات على دور الحكومة في النشاط الاقتصادي، وتبعا لذلك حجمها الذي يعد من أكثر المجالات تأثرا بفلسفة الأنظمة الاقتصادية في السابق. ولتحقيق هذا الهدف تستذكر الورقة في البداية المسوغات الرئيسة لتدخل الحكومة في النشاط الاقتصادي، ثم نستعرض بشكل سريع ولغرض المقارنة مبررات الفرضية الضمنية السائدة التي ترى أن الحكومة أصغر في دولة إسلامية وذلك بناء على نتائج عدد من البحوث المختارة التي تلخص معظم الكتابات السابقة عن المالية العامة في الإسلام. بعد ذلك تتطرق الورقة إلى التأثير المحتمل على حجم الحكومة بسبب التحول الرقمي الذي يتيح للأفراد التعامل المباشر فيما بينهم دون الحاجة لوجود سلطة مركزية، أو بمعنى آخر تتيح للأفراد قدرة أكبر في معالجة فشل السوق (المبرر الرئيس لتدخل الحكومة في النشاط الاقتصادي) دون تدخل مباشر من الحكومات المركزية. وستلقي هذه التغيرات بظلها ليس فقط على الحجم الفعلي للحكومة في النشاط الاقتصادي، بل على التحليل الاقتصادي لدور القطاع العام، وعلم الاقتصاد برمته. وأبعد من ذلك، قد نرى في ظل البيئة المتصورة التي تطرحها الورقة، أن القيم التي يؤمن بها الناس هي التي تحدد، من خلال نهج تصاعدي، شكل النظام الاقتصادي والاجتماعي السائد في أي دولة. وهو ما يعني أن للتحول الرقمي – الذي يبدو تقنيا محضا – آثار بعيدة المدى على المعايير القيمية التي تحكم عمل الاقتصاد. English abstract: In the second half of the last century, the world witnessed a third industrial revolution or a digital revolution as a result of the tremendous developments in information and communication technology, computers and mobile phones, and this development resulted in an accelerated digital transformation that culminated in what became known as the Fourth Industrial Revolution (4IR): Internet of Things, Artificial Intelligence, Big Data, Blockchain, etc. These developments had a clear impact on public, private and non-profit sectors of economy. This impact can explain the several new terms that have appeared during the past decades which describe the economy as a result of this development (knowledge economy, Internet economy, or networks economy, or participatory economy, access economy, community-based economy, peer-to-peer economy, cooperative economy, platform economy, digital economy, virtual economy, attention economy, information economy). This paper aims to assess the expected impact of these developments on the government's role in economy, and as a result on its size. To achieve this objective, the paper recalls at the outset the main justifications for the government’s intervention in economy. Then, for the purpose of comparison, we quickly review the justifications for the prevailing implicit assumption that “government size is smaller in an Islamic economy,”. Afterward, the paper assesses the potential impact of digital transformation on the role of the government and its size as a consequence of 4IR innovations that allows individuals to deal directly with each other without the need for a central authority, which in turn allows individuals to deal with market failure (the main justification for government intervention in economy) without direct intervention from Central governments. These changes will cast a shadow not only on the actual size of the government, but on the economic analysis of the role of the public sector, and economics. Further, we may speculate, considering the author’s views presented by the paper, that individuals’ values can determine the form of the economic and social system prevailing in any country. This means that the digital transformation - which appears purely technical - has far-reaching implications for the value standards that govern the functioning of future’s economies.

Public Works as a Measure of Famine Relief in Russia. 1891–1914

Introduction. The article deals with the program of public works introduced by Russian government in the late XIX – early XX centuries as a measure of famine relief. It provides the detailed account of public works campaign of 1911–1912, which was the largest in terms of government spending and number of employed persons. Materials and Methods. The study relies on a large body of archival sources and published statistical data. Results. The study demonstrates the increasing scale of public works programs between 1891 and 1914. The number of employed persons rose from several tens of thousands in 1891 to almost 3 million in 1911. The share of wages in total expenses grew from 40 percent in 1891 to 80 percent in 1911. There is also some evidence for considerable improvement of quality of the public works projects. Discussion and Conclusions. On the example of public works, I demonstrate how the bureaucratic apparatus of Russia adapted to the implementation of the new managerial objectives. I conclude that Tsarist state was capable to implement the urgent and effective measures of government economic intervention to prevent social collapse.

Industrial Policy, Credit Financing and Corporate Inventory

As a way of government intervention in economy, industrial policy has an important impact on the decision-making behavior of enterprises.However, scholars have different views on the role of industrial policy.The article uses 33,154 A-share annual observation samples from 2000 to 2018 as the research object, examines the impact of industrial policies on corporate credit financing, and analyzes the economic consequences of industrial policies affecting credit financing from the perspective of inventory. The research conclusion shows that industrial policies can have an important impact on corporate credit financing. Compared with enterprises that are not supported by industrial policies, enterprises that are supported by industrial policies receive more credit financing; the convenience that industrial policies bring to corporate credit financing can encourage enterprises to expand their production scale, which in turn leads to a backlog of corporate inventories. The article expands the literature system of government macro-control that affects corporate behavior, and helps academics and practitioners to better understand the transmission mechanism of industrial policies affecting the real economy. Keywords: Industrial Policy; Credit Financing; Inventory; Production DOI: 10.7176/EJBM/12-17-04 Publication date: June 30th 2020

A Study on the Effects of Industrial Structure Changes on Innovation Capacity

This article which is based on the measurement of rationalization and upgrading of industrial structure explores the effects of industrial structure changes on regional innovative capacity by using econometric model that is built by thirty regions’ balanced panel data from 1997 to 2011 in China. The empirical results show that the rationalization and upgrading of industrial structure would promote the regional innovation capacity and at the present stage the contribution which rationalization makes to regional innovation capacity is greater than that of upgrade. Meanwhile, effective demand and finance demand have been playing a positive role in promoting innovation ability, while investment growth, government intervention in economy and openness represent negative effects on regional innovation ability.

Institutional and legal conditions for the German stabilization policy during the economic crisis 2008–2009

Motivation: The economic crisis of 2008–2009 and its consequences have raised a debate among economists concerning the effectiveness of methods stabilizing economy arising from the recommendations of economic theories forming the mainstream economy. Results: The necessity to take anti-crisis measures in the countries affected by it resumed the interest in the recommendations proposed within this realm by John Maynard Keynes. Keynesian solutions have been globally adopted as a basis for anti-crisis stabilization policy. In economic policy it has been manifested primarily as the increased government intervention in economy via the increase of costs and enlarged budget deficits. One of the countries that have applied such a solution was the Federal Republic of Germany. Aim: The aim of this article is presenting the institutional and legal means of German stabilization policy as well as attempting to evaluate their effectiveness in restoring macroeconomic balance in Germany. In this regard, Keynesian Act to Promote Economic Stability and Growth, passed in 1967, which enabled using the appropriate remedial measures was addressed in detail.

Russian Nanotechnology Industry Development: The Impact of External Political and Economic Sanctions

1. Introduction One can hardly agree with those who see only positive effect (increased motivation, government stimulus, growth in domestic demand and sales, etc.) of the sanctions against Russia. Public opinion is focused on domestic issues and underestimates the importance of the external problems arising. But global assessments of Russian nanotechnology industry (nanoindustry) current state are not overestimated or contrived. It should be mentioned that nanoindustry is interpreted in this study as an over-sectoral form of economy development based on the scaled organizing the standardized mass production of the new generation of goods and services, manufactured with the use of general purpose nanotechnology and promoted at all global economic system structure levels. Development of this new global technological mode is an extremely complicated process, which increases competition, forcing the participants of the process to establish barriers and impose sanctions, change their strategic orientations and priorities, formats and mechanisms of their doings associated with enormous risks not only for Russia but also for all of its partners in investments, projects and collaborations in the future development of the nanoindustry. External sanctions have already created two high barriers to nano-industrialization in the Russian Federation: technological and financial ones. Technological barrier limits the delivery of necessary equipment in its significant part, and it is difficult to overcome this barrier in many cases. Financial barrier has become an obstacle on the way to the European and American financial markets while investment needs growth still persists. It is hard to pull through the both barriers at the same time, taking into consideration not sufficiently solved problems of technological and financial aspects of Russian nanoindustry development. However, the barriers encountered have not closed the realization of projects, but made it much more complicated. The Russian Government intends to continue implementing the strategy of nanoindustry and its infrastructure development, considering the unfavorable global environment, using the methods and tools of targeted programming, of selective organizational and financial support for firms and projects on the country and regional scale, aimed at reducing dependence on imports of equipment, component parts and materials. In times of crisis and sanctions, opposing nano-industrialization processes in the Russian Federation, government intervention in economy is especially important. Lack of the state support for Russian nanoindustry in modern conditions can lead to the degradation of SR&ED (Scientific Research and Experimental Development) or to the use of the achieved results by foreign competitors. An important role in overcoming the negative trends in the national nanoindustry at this stage may also play initiative institutes of its development, partly replacing the institute of state, as his substitutes, and partly working with him, functionally complementing it, as so-called completutes. The Russian state and traditional institutes have taken a number of measures to facilitate the functioning of innovative enterprises in the domestic market, but efforts from above are not enough for the system creating a favorable environment for nano-industrialization. Only together with representatives of the business, the direction to move in difficult conditions of Russian economic development refraining can be exactly determined. This task is designed to be solved by cross-sectoral, regional and inter-regional associations of employers and employees as initiative institutes of nanoindustry development and self-regulation (Russian Nanoindustry Association, 2015). The financial, institutional, informational and organizational support for nanoindustry development is already being implemented by most of the powerful development institutes of the Russian Federation, while their system coordination has not achieved yet. …

Disclosure of government financial information and the cost of local government’s debt financing—Empirical evidence from provincial investment bonds for urban construction

China’s slowing economic growth and rapid urbanization have made local government debt financing a significant issue. This study uses a sample of China’s provincial government data for the 2006–2012 period to examine the effect of the disclosure of financial information by local governments on their debt financing costs. The results show that financial information disclosure is conducive to public supervision and enhances government credibility, leading to a decrease in the cost of debt financing. Furthermore, increased government economic intervention increases the strength of the association between financial information disclosure and the cost of debt financing. Increased government audit prevention function weakens the strength of the association between financial information disclosure and the cost of debt financing.

Mike O'Connor. A Commercial Republic: America's Enduring Debate over Democratic Capitalism.

Mike O'Connor's A Commercial Republic: America's Enduring Debate over Democratic Capitalism is an ambitious work of intellectual history. O'Connor begins with a straightforward question that has been in the forefront of popular debate in the years since the 2008 economic collapse: What has been—and what should be—the federal government's role in shaping and reshaping the national economy? It should be none, say many, insisting that recent government economic intervention is an aberration, harmful to economic growth. It should be more, answer others, arguing that only through federal regulation and involvement can the democratic promise of both liberty and equality be maintained. These contradictory answers, O'Connor tells us, share space in the ongoing fierce debate, reaching back to the early republic, over the possibility of ensuring both democratic government and boisterous capitalism. Tracing that debate is the project of this book. To do so, O'Connor begins in the early republic and charges chronologically through the Jacksonian era, the postbellum period, the Progressive Era and New Deal, the postwar years, and ends in the Reagan/Bush years. O'Connor takes what he calls a case-study approach, picking one particular issue or idea from each period to help him dissect contemporary worries over the relationship between capitalism and democracy. The ideological pendulum swings from chapter to chapter (and within chapters as well), from favoring government intervention to staunchly opposing it. Only the swing itself remains constant. Individual chapters look at (in order) debates over the ideal of economic stewardship in the 1790s, the question of separating government and economy in the 1830s, expanded property rights in the age of incorporation in the 1870s, the plausibility of full employment in the 1930s, the amelioration of inequality in the postwar period, and the hazards of taxation in the 1970s and 1980s.

Economic regulation and its reform: what have we learned?

The past thirty years have witnessed a transformation of government economic intervention in segments of industry throughout the world. Many industries historically subject to economic price and entry controls have been largely deregulated, including natural gas, airlines, and commercial banking. However, recent concerns about market power in restructured electricity markets, airline industry instability amid chronic financial stress, and the challenges created by the repeal of the Glass-Steagall Act have led to calls for renewed market intervention. Economic Regulation and Its Reform collects research that explores these and other issues surrounding government economic intervention, providing an assessment of the economic effects of regulatory reforms over the past three decades and examining how these insights bear on some of today's most significant concerns in regulatory policy.

O Poeta como Economista:

O autor mostra que, apesar de Shelley ser tido como “esquerdista”, o poeta não é inimigo do capitalismo, mas do feudalismo e do mercantilismo. Shelley defendia a eliminação da intervenção do governo na economia, e a implementação do livre mercado para aumentar o bem-estar da Inglaterra, diminuindo o fosso entre ricos e pobres. Além disso, Shelley criticava a manipulação mercantilista da moeda pelo governo e a dívida nacional inglesa, bem como, apoiava o pleno direito à propriedade e à herança. O autor conclui que Shelley foi muito mais liberal do que socialista ou proto-socialista.

Government Economic Intervention and Corruption

Corruption is a serious problem worldwide, especially in developing countries. This study investigates the impact of eight forms of government economic intervention on corruption in 157 countries grouped either by per-capita income or by region, for the period 2000 to 2006. The evidence shows that property rights were consistently the most important source of corruption suggesting that anti-corruption efforts should start with reforming the legal system. Corruption was also found associated with government intervention in business and trade and less so in the financial and monetary areas. Government spending and taxation were negatively associated with corruption, implying that what contributes most to corruption is not government size or taxes, but instead regulations and the failure to adequately protect property rights. There appears to be ample room to reduce corruption, especially for developing economies by simplifying and reducing government economic intervention.

Competition Policy under Economic Recessions: Historical Changes and Implications

Before the current financial crisis, economic recessions in history were always accompanied by relaxation or abandon of competition policy. However, in the current financial crisis, although different jurisdictions have different practices, most jurisdictions have kept the bottom line of competition policy enforcement. Such historical transformation roots in deep reflections on historical failures and the popularization of competition policy as well as the strengthening of the competition authorities. Chinais one of the few countries still weakening competition policy enforcement during the current financial crisis. In fact, there are several mechanisms contained in competition laws and policies, such as the exemption of cartels, the defense of business concentrations and the coordination between competition authorities and sector regulators, which provide some space of flexible competition policy enforcement during economic recessions. Considering China’s short history of competition policy enforcement and consistent tradition of government intervention in economy, it is strongly advised to hold on the bottom line of competition policy and pay more attention to government-led anti-competitive conducts during economic recessions.

The Great Depression in High School Social Science Textbooks : Critiques and Suggestions

The Great Depression is one of the most important economic incidents in the twentieth century. A significant and long-lasting impact of this event is the rise of the government intervention to the economy. Under the catastrophic downturn of the economic condition worldwide, people required their government to play an active role for economic recovery, and this mentalite prolonged even after the Second World War. Social science textbooks taught at Korean high schools mostly referred to the Great Depression for explaining the reason of government intervention in economy. However, the mainstream view commonly found in the textbooks provides a misleading theological interpretation. It argues that inherent flaws of the market economy causes over-production/under-consumption, and that this mismatch ends up with economic crisis. The chaotic situation was resolved by substitution of the governments for the market, and the New Deal was introduced as the monumental example (‘laissez-faire economy→over-production→the Great Depression→government intervention→economic recovery’). Based on economic historians’ researches for past three decades, I argue that this mainstream view commits the fallacy of ex-post justification. Unlike what the mainstream view claims, the Great Depression was neither the result of the ‘market failure’, nor the recovery from the Great Depression but was due to successful government policies. For substantiating this claim, I suggest three points. First, blaming the weakness or instability of the market economy as the cause of the Great Depression is groundless. Unlike what the textbooks describe, the rise of the U.S. stock price during the 1920s cannot be said as a bubble, and there was no sign of under-consumption during the 1920s. On the contrary, a new consensus emerging from the 1980s among economic historians illustrates that the Great Depression was originated from ‘the government failure’ rather than from the ‘market failure’. Policymakers of European countries tried to return to the gold standard regime before the First World War, but discrepancies between this policy and the reality made the world economy vulnerable. Second, the mainstream view identifies the New Deal as Keynesian interventionism and glorifies it for saving the U.S. economy from the crisis. However, this argument is not true. The New Deal was not Keynesian at all. What the U.S. government actually tried was not macroeconomic stabilization but price and quantity control. In addition, New Deal did not brought about economic recovery that people generally believe. Even after the New Deal, industrial production or employment level remained quite low until the late 1930s. Lastly, studies on individual New Deal policies show that they did not work as they were intended. For example, the National Industrial Recovery Act increased unemployment, and the Agricultural Adjustment Act expelled tenants from their land. Third, the mainstream view characterizes the economic order before the Great Depression as laissez-faire, and it tends to attribute all the vice during the Industrial Revolution era to the uncontrolled market economy. However, historical studies show that various economic and social problems of the Industrial Revolution period such as inequality problems, child labor, or environmental problems cannot be simply ascribed to the problems of the market economy. In conclusion, the remedy for all these problems in high school textbooks is not to use the Great Depression as an example showing the weakness of the market economy. The Great Depression should be introduced simply as a historical momentum that had initiated the growth of government intervention. This reform of high school textbooks is imperative for enhancing the right understanding of economy and history.

Public Support for National Health Insurance: The Roles of Attitudes and Beliefs

The U.S. is the only developed country without some form of national health insurance. Yet, public opinion polls have consistently reported solid majorities in favor of such a system. In this paper, we examine whether attitudes toward different roles of government and beliefs that may be related to those attitudes are consistent with widespread support for national health insurance. Our analysis is based on the premise that a system of national health insurance would require government redistribution and government intervention in health care markets. We find that people who have favorable attitudes toward government economic intervention are 27 percentage points more likely and those with favorable attitudes toward government economic intervention are 18 percentage points more likely to favor national health insurance than those with unfavorable attitudes. The most intense support for national health insurance, strongly favoring as opposed favoring it, is among people with favorable attitudes toward both roles of government. Consistent with research from other social programs, we find that the beliefs regarding racial minorities, as well as beliefs regarding individual control over life, limit support for national health insurance in the U.S. On the other hand, negative beliefs regarding businesses are an important source of support for national health insurance. We conclude that significant changes in either attitudes and beliefs or their relationship with support for national health insurance are probably necessary to create a strong majority in support of such legislation.

Functioning of market economy and rent-seeking: Why it is necessary to diminish the role of government in economic affairs?

At the beginning, the author points out that rent-seeking economy is a distinctive phenomenon for majority of the contemporary market economies. It is reflected in the aspirations of the well organised interest groups to capture public choice and politicians as a tool to gain non-market benefits for themselves, or to take activities to gain income by non-market redistributions instead to do it on the market. According to the author examples of rent-seeking economy are antitrust, arbitrary export-import restrictions, subsidies for various sectors of economy, unions' practices of closed shop or collective bargaining. The author notes that there are legitimate public goods and services (such as military and police services or infrastructure) and therefore legitimate taxing and spending for providing of such public necessities. In his opinion, however, rent-seeking economy results from the growing government intervention in economy based upon widening of its role and responsibility to handle a wide spectrum of illegitimate ??social?? issues, rather than rest upon better providing of classical government services. Rent-seeking economy is a result of abandoning the strict market economy with no or little income gained by the extra market redistribution. The social environment where it is permissible and desirable to remove as great as possible economic activities from the free, non-regulated markets to the public sector or to the sector of the highly regulated economy which is cartelised by coercion, leads entrepreneurs to change their orientation. They do not perceive the regular competition as the best way to make success, but by lobbying with the political bodies. The basic rule of rent-seeking is that when there is a chance to gain rent, there will be someone who will try to get it. Therefore, in the author's opinion the government and the public inclining towards state interventionism are the main to blame for the rise of rent-seeking. This is because they make chances to gain rents since the general social and political environment enables it, as well as because there is an insufficiency of detailed legislative and constitutional restrictions on the role of the government in economy. Therefore, the basic condition for elimination or at least reduction of the scope of rent-seeking economy, in the opinion of the author, is to drastically diminish the role of the government in economic affairs. In that way the economy would be strictly separated form the politics, and entrepreneurs would be sent a signal that the reallocation of resources from productive to lobbying activities for gaining privileges is not an appropriate way to gain income. Within this context, the author points to consideration of the achievements of the James Buchanan's public choice theory that deals with the defects of political decision-making. He also points to the fact that the essence of the liberal constitutional reform that could diminish the scope of rent-seeking could be best perceived in the words stated by Friedrich Hayek the Nobel prize winner, saying that the government should be prohibited to employ ??coercive discriminatory acts??. This means that the government should not employ its monopoly of physical force to award economic privileges to anyone, but it should adopt laws of general use to be applied to the unknown number of cases in the future, concludes the author.

A small macroeconometric model with direct government intervention on the demand and the supply side: The Canadian experience in the 1970s and in the 1980s

The purpose of this paper is to develop a small macroeconometric model for policy analysis. Emphasis is put on government economic activities that have not been extensively analysed by other models. In particular we look at public production, public employment, public investment, public consumption, price of public output and state money supply as endogenous instruments of policy makers. Other variables such as the exchange rate, state wage rate and labour supply are also used as exogenous policy instruments. The model is estimated and simulated using the Canadian experience in the 1970s and in the 1980s. The main finding is that the actual economic policy was not efficient. A restructuring of government economic intervention would have been more efficient in promoting growth and employment and decreasing the inflation rate.