CHAPTER 8 - Economic Policy
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Publisher SummaryThis chapter focuses on the questions of economic policy and its analysis. The economic functions of the modern state may be described in conjunction with the objectives of economic policy. There are several ways of classifying the economic functions of government, but a simple division between macroeconomic concern with the level of national output, employment and price stability, and microeconomic concern with the allocation of resources is a useful first approximation. There are many ways in which a government may intervene in the market place, though the choice depends upon the particular circumstance it wishes to try and influence. There are two methods available. The first tries to make the market work better by means of taxes, subsidies, price controls, and regulations. The second consists of the replacement of the market by state ownership.

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