Can free markets meaningfully reallocate capital that chases returns in to infrastructure development, and should it?
Can free markets meaningfully reallocate capital that chases returns in to infrastructure development, and should it?
byu/GoldThenCrypto inAskEconomics
Posted by GoldThenCrypto
1 Comment
Many of the things we call infrastructure often are natural monopolies (high fixed cost) and/or have positive network effects. These typically mean that a free market would provide a sub-optimally low level of these goods. It thus becomes possible for policy to improve outcomes although this shouldn’t be read to mean all possible policy proposals would necessarily improve outcomes.