Reduction and Substitution of Markets

Abstract

The article discusses the problem of reducing and replacing markets in the past, present and future. The author assumes that the market collapses when a new market takes its place or is another already existing one is being expanded. Two reasons for the replacement of markets are identified — technical innovations and the deterioration of business conditions in the established markets. In the first case, the replacement of the market comes from the supply side, in the second — from the demand side. When the conditions of activity worsen in one market, buyers’ demand flows from the collapsing market to another, which increases due to this. The author also divides market substitution processes into spontaneous and organized ones. It is noted that the coronavirus epidemic puts on the agenda the problems of curtailing three markets that make up a significant part of consumption in the modern economy: mass gatherings (entertainment events), public transport, and restaurants. It is indicated that economic science in these conditions should reorient its research from the problems of economic growth to the problems of changing the structure and composition of markets to achieve balanced development, taking into account current and future restrictions on activities in the areas mentioned above.