Perhaps one day earthquakes, hurricanes and financial crashes will all be predictable. But we don't have to wait until then for seismology, meteorology and economics to become sciences; they already are.
Eric MaskinRead
Many markets work best with little or no outside interference. But others - especially those subject to big 'externalities' - need a helping hand.
Interpretation
What this quote means
Markets can function independently, but some require external assistance to mitigate negative impacts.
In this quote, Eric Maskin emphasizes the dual nature of markets, indicating that while many operate efficiently on their own, certain markets, especially those affected by significant external factors, may struggle without intervention. This intervention is necessary to ensure fairness and to address issues that may arise from externalities, such as pollution or economic inequality, that can distort market outcomes.
Themes
MarketsExternalitiesInterventionEconomicsEfficiency
In practice
Example use cases
Referencing this quote during a lecture on market dynamics.
More from Eric Maskin
All quotes βSimilar quotes
It is better that a man should tyrannize over his bank balance than over his fellow-citizens.
John Maynard KeynesRead
Our financial system is driven by a giant marketing machine in which the interests of sellers directly conflict with the interests of buyers.
John C. BogleRead
Economics is a choice between alternatives all the time. Those are the trade-offs.
Paul SamuelsonRead
In a sense, the market, by expecting a fall in prices, discounts that fall and makes it happen right away instead of later. Expectations speed up future price reactions.
Murray RothbardRead
It is a [disputed] question, whether the circulation of paper, rather than of specie [gold and silver coin], is a good or an evil I believe it to be one of those cases where mercantile clamor will bear down reason, until it is corrected by ruin.
Thomas JeffersonRead
Actually, in my advanced, high-falutin' frontier economics, I often work with what I define as 'money metric utility,' and I ask people, 'Do you really want that? What are you willing to pay for that?'
Paul SamuelsonRead