Our chapter surveys the literature on why market prices may provide distorted signals, i.e., diverge from socially efficient prices. There are a number of reasons for this to occur, such as price controls, externalities, imperfect competition, taxes, trade controls, etc. Broadly, market failure...

This chapter reviews the ways that economists measure the aggregate economic performance of national economies. Efficiency and productivity analysis using the methodologies of data envelopment analysis and stochastic frontier analysis has made a significant contribution to this challenge after...