Rationale for Public Policy Intervention on Financial Crisis

Criteria: Critical Analysis; research depth; written presentation/creativity Words: 2,000 Description: The objective of the assignment is to employ economic analysis to diagnose potential for market failure in any sector of the UAE economy. The potential for market failure is often a key explanation for government intervention in a market based economy (see Ch 5 of your text). Students will choose a specific sector (USE FINANCIAL CRISIS AS THE TOPIC) to investigate potential market failure, before identifying and analyzing the problem. Your assignment should identify the likely source of market failure: – How it deviates from the ideal competitive market model (i.e the type of market failure); and how economic theory recommends the failure be addressed. For example, you could examine in what circumstances we might need to introduce consumer protection, reduce negative externalities – such as pollution – or provide public / merit goods – such as healthcare and education. The challenge is to evaluate whether government intervention is justified, what type of intervention is needed and where intervention is going to have a positive economic impact in the UAE context.