Moral Hazard: a simple explanation

Kenneth Arrow in 1963 published an article about the uncertainty in economics, focusing in its consequences on the medical insurance. This article introduced for the first time in history the concept of moral hazard. A practical explanation of what moral hazard means can be found in the movie "Wall Street: money never sleep", directed by … Continue reading Moral Hazard: a simple explanation

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The cost and the benefit of a rocket

We can all agree that, although the market is a very efficient tool to allocate resources, there are some cases, such as education and wealth, where the government intervention is, if not essential, certainly highly required. But how can the government understand what people want and what people need? How it should invest, and how … Continue reading The cost and the benefit of a rocket