Archive - March 29, 2021

  Economics demonstrates how markets can serve as remarkably efficient institutions in allocating scarce resources. • At the same time, incomplete information generates prices that can lead to a misallocation, producing in some cases too little while in others too much of a good. Matters become more complicated when striking a balance is influenced by our perceptions of risk. Here, neuroscience provides insights into which, and what kind of public sector interventions one should consider. While there are many types of risk – political, economic, financial, and environmental as individuals confront any crisis, our perceptions of risk can alter significantly the extent to which we look to public sector intervention as a response. In the short run, crises may be managed through greater public intervention while in the long run, economic fundamentals still drive key decisions, and thus the extent to which a given mix meets a test of political . . .