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Wednesday, June 22, 2011

Profile of George Akerlof

The Finance & Development (June 2011) of International Monetary Fund (IMF) makes a profile of Nobel Laureate Economist George Akerlof. It is nicely written and so great to read on the details of this great economist. It is also nice to read Akerlof's views on some basic economic management issues, especially the role of the Government. Here is one of them, 

''With the private economy subject to mood swings, the role of the government is to stabilize the economy through its actions. The government should be like a responsible parent to the economy, neither too authoritarian nor too permissive. Capitalist societies can be tremendously creative, and the government should not be so strict as to interfere with that creativity. But capitalism left to its own devices also runs to excess, and the government’s role is to act as a countervailing force against extravagance.

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