The forces of globalization are with us to stay. In this sixteenth edition of
Microeconomics, we have done our best to ensure that students are made
aware of the world outside Canada and how events elsewhere in the
world affect the Canadian economy.
The Role of Government
Between 1980 and 2008, the political winds shifted in Canada, the United
States, and many other countries. Political parties that previously
advocated a greater role for government in the economy argued the
benefits of limited government. But the political winds shifted again with
the arrival of the financial crisis and global recession in 2008, which led
governments the world over to take some unprecedented actions. Many
soon argued that we were observing the “end of laissez-faire” and
witnessing the return of “big government.” But was that really true?
Has the fundamental role of government changed significantly over the
past 35 years? In order to understand the role of government in the
economy, students must understand the benefits of free markets as well
as the situations that cause markets to fail. They must also understand
that governments often intervene in the economy for reasons related
more to equity than to efficiency.
In this sixteenth edition of Microeconomics, we continue to incorporate the
discussion of government policy as often as possible. Here are but a few
of the many examples that we explore: