Distinguish between a Laissez-Faire economist and an activist economist.© BrainMass Inc. brainmass.com March 4, 2021, 6:48 pm ad1c9bdddf
Free trade policies are often associated with general laissez faire economic policies, which can allow for faster growth.
Laissez faire policies implies the absence of government intervention in trade, entrepreneurship and investment. This is often positively correlated with high per capita income.
The benefits of specialization, coupled with economies of scale, increase the global production possibility frontier. An increase in the global production possibility frontier indicates that the absolute quantity of goods and services produced is highest under free trade. Not only are the absolute quantity of goods and services higher, but the particular combination of goods and services actually produced will yield the highest possible utility to global consumers.
Here the government play an important role as the free trade policy have certain limitaions.
Limitation of liberalization:
Neoliberal policies are leading to a global system of unsustainable production and ...
This helps to distinguish between a Laissez-Faire economist and an activist economist