Statistics & Publication
Issues on Wages and Labour
Friday, 29 August 2008 00:00
Standard economic theory suggests that markets are often the most efficient institutions for the allocation of scarce resources, because they clear to adjust demand and supply, and hence any rent opportunities would be arbitraged away. However in reality, there are frictions, unobservable characteristics, adjustment costs, different expectations, and probably discrimination in markets that tend to drive  market equilibrium away from efficient allocation.

Download full text in pdf pdf-logo