Hoff, Karla2012-05-252012-05-252008-01https://hdl.handle.net/10986/6477Joseph E. Stiglitz, 2001 Nobel Laureate in Economics, helped create the theory of markets with asymmetric information and was one of the founders of modern development economics. He played a leading role in an intellectual revolution that changed the characterization of a market economy. In the new paradigm, the price system only imperfectly solves the information problem of scarcity because of the many other information problems that arise in the economy: the selection over hidden characteristics, the provision of incentives for hidden behaviors and for innovation, and the coordination of choices over institutions.CC BY 3.0 IGOADVERSE SELECTIONAGENCY PROBLEMSAGGLOMERATION EFFECTSAGRICULTUREASYMMETRIC INFORMATIONASYMMETRIES OF INFORMATIONAVERAGE COSTSAVERAGE PRODUCTIVITYBANKRUPTCYBANKSBENCHMARKBEST PRACTICESBIDBUSINESS CYCLESBUYERSCAPITAL ACCUMULATIONCAPITAL MARKETSCAPITAL OUTFLOWSCOMMODITIESCOMMODITYCOMPETITIVE ECONOMYCOMPETITIVE EQUILIBRIUMCONFLICTS OF INTERESTCONSUMERCONSUMER CHOICECONSUMERSCONTRIBUTIONCONTRIBUTIONSCOORDINATION FAILURESCORPORATE GOVERNANCECREDIT MARKETSCREDIT RATIONINGDAMAGESDEBTDEBTORSDEBTSDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT ECONOMICSDIMINISHING RETURNSDISEQUILIBRIUMDISTRIBUTION OF WEALTHECONOMIC ACTIVITYECONOMIC CRISESECONOMIC GEOGRAPHYECONOMIC GROWTHECONOMIC INEFFICIENCIESECONOMIC POLICIESECONOMIC RENTSECONOMIC THEORYECONOMICSECONOMICS OF INFORMATIONEFFICIENT MARKETSEFFICIENT MARKETS THEORYEFFICIENT OUTCOMESEQUILIBRIUM PRICESEQUILIBRIUM UNEMPLOYMENTEQUITY MARKETSEXPECTED RETURNEXTERNALITIESEXTERNALITYFINANCIAL CRISISFINANCIAL MARKETFINANCIAL STRUCTUREFINANCIAL SUPPORTFOREIGN DEBTSFOREIGN INVESTORSFREE CAPITALGAME THEORYGOVERNMENT INTERVENTIONGOVERNMENT OWNERSHIPGROWTH THEORYHIDDEN ACTIONSHOLDINGHOMEOWNERSHIPIMPERFECT INFORMATIONINCENTIVE PROBLEMSINCOMEINCOMESINCOMPLETE MARKETSINCREASING RETURNSINCREASING RETURNS TO SCALEINDIFFERENCE CURVESINEFFICIENCYINFLATIONINFORMATIONAL IMPERFECTIONSINNOVATIONINSURANCEINSURANCE COMPANIESINSURANCE COMPANYINSURANCE FIRMSINSURANCE MARKETINSURANCE MARKETSINSURANCE POLICIESINTEREST RATEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL TRADEINVESTMENT DECISIONSJOB LOSSLABOR MARKETLABOR MARKETSLABOURLACK OF TRANSPARENCYLENDERLENDERSLOANLOAN APPLICATIONSLOW-INCOMEMACROECONOMIC FLUCTUATIONSMACROECONOMIC STABILITYMACROECONOMICSMARGINAL COSTMARKET ECONOMIESMARKET ECONOMYMARKET EQUILIBRIUMMARKET FAILUREMARKET FAILURESMARKET MECHANISMMARKET PARTICIPANTSMARKET PRICESMATHEMATICSMEDICAL CAREMISSING MARKETMISSING MARKETSMONETARY FUNDMONETARY POLICIESMONETARY POLICYMONITORING COSTSMONOPOLISTIC COMPETITIONMORAL HAZARDMULTIPLE EQUILIBRIAMULTIPLIER EFFECTSNET WORTHOPTIMAL CONTRACTPARETO EFFICIENCYPECUNIARY EXTERNALITIESPER CAPITA INCOMEPERFECT INFORMATIONPERFECT MARKETSPOLITICAL ECONOMYPOLITICAL INSTITUTIONSPORTFOLIOSPRIVATE CAPITALPRIVATE PROPERTYPROBABILITYPRODUCTIVITYPROVISION OF INFORMATIONPUBLIC ECONOMICSPUBLIC FINANCEPUBLIC GOODSPURCHASESRECESSIONRENTSRISK MARKETSRISK SHARINGRISK-AVERSE INDIVIDUALSRISKY ASSETSRULE OF LAWSAVINGSSEARCH COSTSSENIORSTOCK MARKETTAXTAXATIONTRANSACTIONTRANSITION COUNTRIESTREASURYUNEMPLOYMENTUTILITY FUNCTIONVALUABLEWAGEWAGESWEALTHWELFARE ECONOMICSWorld Bank10.1596/1813-9450-4478