Friday, 22 April 2016

Stop worrying. The finance sector isn’t destroying the economy (Martin Neil Baily, Brookings)

A major oil spill will result in cleanup spending that boosts GDP, but no one thinks oil spills are good. Oil spills and other forms of pollution are examples of negative externalities — harm caused to others by the economic activity of a firm or industry. These externalities represent a failure of the market, and unless there is corrective action, their presence means that there is too much production of something that causes negative spillovers.

http://www.brookings.edu/research/opinions/2016/04/21-the-finance-sector-isnt-destroying-the-economy-baily

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