Journal Article
Is the “invisible hand” still relevant?
Abstract: The single most important proposition in economic theory, first stated by Adam Smith, is that competitive markets do a good job allocating resources. Vilfredo Pareto?s later formulation was more precise than Smith?s, and also highlighted the dependence of Smith?s proposition on assumptions that may not be satisfied in the real world. The financial crisis has spurred a debate about the proper balance between markets and government and prompted some scholars to question whether the conditions assumed by Smith and Pareto are accurate for modern economies.
Access Documents
File(s): File format is text/html http://www.frbsf.org/publications/economics/letter/2010/el2010-14.html
File(s): File format is application/pdf http://www.frbsf.org/publications/economics/letter/2010/el2010-14.pdf
Authors
Bibliographic Information
Provider: Federal Reserve Bank of San Francisco
Part of Series: FRBSF Economic Letter
Publication Date: 2010
Order Number: 14