Rethinking Growth and the State

Philippe Aghion (1, 2, 3) , Julia Cage (2, 3)

1 Harvard University
2 PSE - Paris School of Economics
3 PSE - Paris-Jourdan Sciences Economiques

Government intervention is often perceived as a constraint on market forces and thereby on economic growth. In particular, over the past three decades, increasing awareness that product and labor market liberalization enhances growth has led scholars and policy makers to also recommend a reduction in the role and size of governments. True, the recent global fi nancial crisis showed the importance of the state as a regulator for the fi nancial system. Indeed, when fi nancial institutions are “too big to fail,” the state may have to intervene to preserve the stability of the whole system.1

Domaines: Economies et finances

Philippe Aghion, Julia Cage. Rethinking Growth and the State. Ascent after decline : regrowing global economies after the great recession, World Bank, pp.181-200, 2012. ⟨halshs-02923419⟩