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28 October 2014

How to design market-friendly regulation (Nobel)

It's good news for all smart regulators when the Nobel prize for economy is given to an expert who has devoted part of his research to the negative impact of regulation on economic activity, chiefly by regulatory interference with markets, and offering solutions.
An article in last week's Economist (18 October) examines Mr Tirole's contribution under the title "It's complicated" (one of the laureate's favorite phrases). "Making sure companies compete fairly is a tricky business. The firms being regulated know far more about their business than those doing the regulating; bureaucrats can easily end up being too heavy-handed or too lax. On October 13th Jean Tirole, a French economist at the Toulouse School of Economics, was awarded the Nobel prize in economics for his work on this conundrum—"industrial organisation", in the jargon."

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