ABSTRACT
Adam Smith and his system of natural liberty achieved a significant degree of influence after the fall of the Soviet central-planning model in the early 1990s and before the Great Recession of 2008–2009. The financial crisis of 2008 exposed the economics profession to deep divisions on how to deal with economic recovery and the role of deficit spending, taxes, distribution of income, and other macroeconomic issues. The Laffer curve was invented by Arthur B. Laffer, a former economics professor at University of Chicago and University of Southern California, who allegedly drew the famous curve on a napkin at a Washington, D.C., restaurant in the late 1970s. The theory of rational expectations has been effectively applied in many areas, including government policy and the financial markets. The article noted that in China state-owned enterprises account for 80 percent of the Chinese stock market and whose economy has been growing much faster than market-oriented economies in the West.
