Authors: XÈNIA ALEMANY, SOFIA GROIZARD
Abstract
What is a market economy and why is it so powerful? What state controls are necessary to make markets function efficiently? Who is responsible for making decisions in a market economy? How do markets determine prices, wages, and products? How does the market solve the three economic problems? Who governs the market economy? Are companies like Apple or Tesla the ones leading the way? Or is it rather the Congress and the president? How does the state perform its functions?
Those are some questions raised in this essay, where the authors do a systematic review of the main characteristics of a market economy. The article introduces the discussion on the necessity of state regulation of the market through a micro level and at a macro level using mainly the statements of Keynes and Friedman, two opposite economists on the topic. The essay goes through the pros and cons of each part and ends up on a state intervention position.
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