New Economic Engine: Effective Government and Efficient Market by Yunxian Chen

Author:Yunxian Chen
Language: eng
Format: epub
ISBN: 9789811529221
Publisher: Springer Singapore

© Foreign Language Teaching and Research Publishing Co., Ltd and Springer Nature Singapore Pte Ltd. 2020

Y. ChenNew Economic Engine: Effective Government and Efficient MarketChina Academic Libraryhttps://doi.org/10.1007/978-981-15-2922-1_6

6. Modern Market Economy

Yunxian Chen1

(1)School of Economics, Peking University, Beijing, China

Yunxian Chen

Email: [email protected]

1 The Horizontal System of Modern Market

After the systematic analyses earlier, the purpose of this chapter is to further clarify that in the horizontal market system, not only are there market subjects in industrial economy—enterprises, there are also market subjects in urban economy—regional governments, as well as market subjects in international economy who provide quasi-operational resources, that is, public goods, including market subjects responsible for the development of space resources in space economy and marine resources in marine economy—governments or enterprises. So to speak, firstly, the market exists not only in industrial economy, but also in other economic forms. Secondly, in the horizontal market system (including industrial economy, urban economy, and international economy such as space economy, marine economy, and others), there are dual competitors—enterprises and governments. And finally, industrial economy is the fundamental field of market economy, whereas urban economy and international economy (including space, deep-sea and other resources that develop through the times) are generative fields of market economy; they are mutually independent and yet, interrelated, and belong to the competition systems of different levels in modern market economy. The multi-level market competition systems collectively constitute modern market economy.

Traditional market theory, also known as firm equilibrium theory, specifically studies how firms determine the price and output of their products in different types of markets. As a result, four basic market types can be distinguished: perfectly competitive market, monopolistic competitive market, oligopolistic market and perfectly monopolistic market. Hence, traditional market theory analyses the market, firms and industries; cost, income and output; and even firm equilibrium in the perfectly competitive market, perfectly monopolistic market, monopolistic competitive market and oligopolistic market. As was known from earlier discussions, firstly, traditional market theory focuses mainly on industrial economy, or rather, the theory itself is clarified in industrial economy. Secondly, Adam Smith’s Wealth of Nations, being the pioneering work of economics and market economy theory, is undoubtedly a great work. However, limited by the times, after criticizing mercantilism and physiocracy, Adam Smith mainly based on industrial economy to investigate commodity, price, supply and demand, competition and market, and failed to discuss the economic operations of new generative resources and fields in new generative economics. Thirdly, in order to deal with the massive unemployment of British workers in the 1920s and the Great Depression of the United States and even the world economy in the early 1930s, Keynes attempted to lever a new field, urban economy, that is, the investment and construction of infrastructure, to stimulate effective demand. However, confined by the market theory in industrial economy, he failed to explain the effects of governments in their participation and intervention in the investment and construction of urban infrastructure. Finally, as discussed earlier, the contradiction between practice and theory as reflected by market failure or government failure, in essence,

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.