Mixed economy

A mixed economy is a mixture of market economy and planned economy. A mixed economy is based on a market economy, but the government tries to control the economy where the market has failed.

A mixed economy regulates and controls a market economy so that it works optimally on the basis of public interest. We tend to talk about a number of market failures where the market does not work and where central control is desirable. Income distribution in a pure market economy can be very unfair and in a mixed economy we try to make this more equitable by providing medical care, distributing aid and provide other public services for public goods.