market economy


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Market Economy

A social and economic system in which prices are fixed by the law of supply and demand rather than by a government or other body. In its pure form, a market economy is an economy absent of government subsidies, incentives, or regulations. A market economy contrasts with both a planned economy and a mixed economy. No economy is a complete market economy: most countries claiming to have market economies in fact have a market economy combined with greater or lesser government regulation, sometimes called a social market. Proponents of a market economy argue that it is more efficient than any alternatives, promotes fair competition between its participants, and rewards skill and hard work. Critics allege that a market economy perpetuates class differences and rewards ruthlessness over actual labor. Milton Friedman, Friedrich Hayek, and Ludwig von Mises were three major 20th-century proponents of the market economy. See also: Capitalism, socialism, John Maynard Keynes.

market economy

see PRIVATE-ENTERPRISE ECONOMY.
References in periodicals archive ?
official said those countries eventually earned market economy status as evidence of state subsidies and state distortions waned.
Europe should think twice before it makes a final decision about China's market economy," warned the state-run news agency Xinhua in response to the parliament's resolution.
The United States dropped out of the "free" quintile in 2010; it is a market economy only to a certain degree.
We believe that if China does achieve Market Economy Status it will be a catastrophe for our industry and most likely the final nail in the coffin for UK steelmaking.
In the VoC-approach, two "ideal" types of capitalism are distinguished: a liberal market economy and a coordinated market economy.
One is being a functional market economy and the other is that the economy is competitive.
They discuss lessons from the past: monetary union, future challenges: economic union and a social market economy, economic union and the problem of rules, and the Atlantic dimension of a social market economy.
It would be easier for Chinese firms, which are unfairly labelled as subsidised agents of the Chinese government, to obtain market economy status," Hosuk Lee-Makiyama, co-director of the European Centre for International Political Economy (ECIPE), told Europolitics.
Free market economy doesn't rule out government intervention.
According to the authors, history shows that "a productive market economy requires the existence of a particular set of beliefs and institutions in order to establish the incentives that will encourage people to participate in a market economy and be sufficiently rewarded for their efforts" (p.
The decrease in the number of days Bulgarians need in order to make the revenues does not mean that they have more freedom now, Institute for Market Economy analysts Peter Ganev has explained.
China may not automatically get market-economy status at the WTO in 2016 - if China wants the EU to recognize it as a market economy, it should comply with the explicit criteria in EU law