Mature Market Economy-A Combination of Effective Government and Efficient Market

The relation between government and market is the Goldbach conjecture in economics. As this article indicates, Adam Smith’s third work attempted to expound national government behavior and proceeded to probe into the roles and functions government should play, and Keynes explained in his work why a series of measures were proposed to intervene in effective demand, rather than why national government could, in the capacity of a participant or one of the major entities, propel investment and infrastructure construction. The article goes on to prove that studies in resource generation have remained a blank that awaits to be filled in the mainstream economic theorization of modern times, that government plays the role of a competitive entity in the area of generative resources, that government competition can be classified in the narrow and broad sense, that efficient market can be divided in three tiers, that effective government can be represented in terms of their performance, and that there are nine modes of combining effective government and efficient market. This article breaks out of the limitations of the mainstream western economic system and the configuration of market theories. First, it proposes in market economic theorization that a mature economy is one integrating effective government and efficient market. It holds that many issues and practical problems in the economic development of the world are the indications of defects in traditional market theories the blanks of modern market theories, rather than problems with the market. Second, it proposes the conceptualization of “mezzoeconomics” in the economic theoretical system that plays an active and innovative role in economic growth, believing that the setup of the mezzoeconomic system, with regional or urban economy as its carrier and regional government as one of its entities of competition playing its competitive role in the allocation of newly generated resources, means remedying the defects in the orthodox economic system and filling the blank in the current economic system. Third, it puts forth theories of new economic engines for world economic growth and holds that government should try their best to build up new engines for investment, innovation and new governance, with focus on the development and construction of infrastructure. This article aims to substantiate the government-market relation by basing its analysis on explorations in China’s reform and opening up, economic development and operative modes and making use of development experience and research findings in world economic practices. It defines three categories of resources and the attributes of resource allocation in different phases of development and reveals the duality of economic attributes of government and entities of market competition and the necessity of mature economy integrating effective government and efficient market. It emphasizes that government needs foresighted leading in order to succeed, needs competition in innovation and needs innovation in competition. China’s reform and opening up and innovative development furnish fertile soil for such economic generalization. Findings in this research will be incorporated into world economic theorization and will eventually serve world economic growth. A new era of global economic development has dawned, ushering in a new realm for the formation and development of Citation: Chen Y (20108) Mature Market Economy-A Combination of Effective Government and Efficient Market. Arch Bus Adm Manag: ABAM-115. DOI: 10.29011/