In this volume, economists address the matter of the role of policy in a market economy. They ask whether the "invisible hand" mechanism is able to allocate resources to meet the needs of society. They draw on recent work on imperfect information and strategic behaviour, and argue that the models of classical welfare economics are inadequate for understanding modern market economics. The first two chapters attack these standard theories directly, while the following contributions focus on specific examples and areas.
Introduction, David Vines and Andrew A. Stevenson; the invisible hand and modern welfare economics, Joseph E. Stiglitz; the welfare economics of market economies, Frank Hahn; the environment as a commodity, Partha Dasgupta; macroeconomics and market failure, Edmond Malinvaud; strategic perspectives on economic policy, Kenneth Rogoff; international policy co-operation, exchange rates and industrial policy, Andrew A. Stevenson and David Vines.