IE Thought of the Week

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"Adam Smith’s Invisible Hand will guide you to an efficient allocation of resources only if markets yield prices that reflect ‘true’ social costs.  If there are market failures,as when a producer pollutes the air but does not have to pay for this pollution, then the invisible hand can lead you in the wrong direction.  Or, to put it in flamboyant terms, it can immiserize (impoverish) you."

~ Jagdish Bhagwati

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