კონფერენცია

∘ Rozeta Asatiani ∘
GOVERNMENT REGULATION OF EXTERNALITIES

Summary

In modern global economy the government regulation of externalities acquires extremely great importance and it is one of the main directions of the functioning of public sector economics. The market is not able to function equally in all spheres of the economy, and in some of them does not act at all, it is not capable to solve many other problems.

Business instability creates unemployment, inflation and conditions for the bankruptcy of entrepreneurs. Market competition causes income differences in a society and unfair income distribution. Therefore, the market fails to provide the low-income layers of population with goods and services necessary for existence. The market cannot eradicate social evils; solve issues associated with natural disasters. It cannot provide security, ensure the functioning of social institutions, and also, which is extremely important, the market cannot protect environment and solve ecological problems.

Ivane Javakhishvili Tbilisi State University Paata Gugushvili Institute of Economics International Scientific C O N F E R E N C E S "ECONOMY – XXI CENTURY"

E ISSN 2587 - 4691	∘ Rozeta Asatiani ∘ GOVERNMENT REGULATION OF EXTERNALITIES Summary In modern global economy the government regulation of externalities acquires extremely great importance and it is one of the main directions of the functioning of public sector economics. The market is not able to function equally in all spheres of the economy, and in some of them does not act at all, it is not capable to solve many other problems. Business instability creates unemployment, inflation and conditions for the bankruptcy of entrepreneurs. Market competition causes income differences in a society and unfair income distribution. Therefore, the market fails to provide the low-income layers of population with goods and services necessary for existence. The market cannot eradicate social evils; solve issues associated with natural disasters. It cannot provide security, ensure the functioning of social institutions, and also, which is extremely important, the market cannot protect environment and solve ecological problems.