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Missed InformationBetter Information for Building a Wealthier, More Sustainable Future$
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David Sarokin and Jay Schulkin

Print publication date: 2016

Print ISBN-13: 9780262034920

Published to MIT Press Scholarship Online: May 2017

DOI: 10.7551/mitpress/9780262034920.001.0001

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PRINTED FROM MIT PRESS SCHOLARSHIP ONLINE (www.mitpress.universitypressscholarship.com). (c) Copyright The MIT Press, 2020. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in MITSO for personal use.date: 26 October 2020

Information and the Market Economy

Information and the Market Economy

Chapter:
(p.25) 2 Information and the Market Economy
Source:
Missed Information
Author(s):

David Sarokin

Jay Schulkin

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262034920.003.0003

The Soviet Union tried to manage the information needed to run a centrally-planned economy. Their efforts failed in large measure due to information shortcomings. Capitalism is a much better information processor, relying on the ‘invisible hand” to recognize and respond to market signals. But capitalism can have information failures too, as evidenced by Enron, the subprime mortgage crisis, and the work of information economists.

Keywords:   Information economics, Collapse of the Soviet Union, Subprime mortgage crisis, Invisible hand, Garbage in, garbage out (GIGO)

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