Authors Econ
Hemphill
situation in which people do not find satisfaction met by the market
- externalities
-internal decisions
3 mechanism that lead to discrepancy between individuals:
1 DISTRIBUTIONS = inequality of income
2 Intrinsic motivation= people work for satusfaction and a good job
exteinsic motivation = people work for financial rewarding
3 Competition and coorperation
DeGrauwe
Government to ultimately save the market from its own destruction
-Externalities: by levying taxes for those who do bad behavior (progressive wealth tax)
-Supplying public goods
-Redistrivution
the great economic pendulum
swings between greater and poorer government intervention
-cyclical movements
A-Growth
has to be indifferent to economic growth
De-Growth
Intentional limiting & downscaling of the economy to make it consistent with biophysical boundaries
Helbing- Externalities
Externalities among the main reasons governments intervene in economic sphere
-pose fundamental economic policy problems
-In some circumstances, they may prevent markets from emerging
-optimal government intervention might be the establishment of institutional framewor
Claessens - Recession
characteristics of recession
1- Typically lasting for a year, resulting in significant output cost
2- Industrial production & investment register large declines
3-Unemployment rate jumps
Inflation falls slightly since demand for goods & services decreases
Horton & Asmaa : Fiscal policy
fiscal policy: government way of taxation
-Influence economy:
1 monetary policy
2fiscal policy
Balanced Reaction by governments to financial crises:
1. Targeting stimulus to the poor, which yields full spending & strong economic effect
2. Funding capital investment (to create jobs & booster long-term growth)
3. Tax cuts
Causa: Income Refistribution OECD countries
- provides a setting where governments can compare experiences, seek answers to common challenges, identify good practices, and develop high standards for economic policy
Mankiw: Defending the One percent
Perfect economic equality:
o Everyone earns exactly the same income
earning = value of marginal product
o No need for income tax
o Perfectly efficient
-Entrepeneurs realise inequality in the market
-Inequality of opportunity
- education, genetic inheritance, environmental factors ; highly unequal & inefficient
Mayhew: Inequality
- Gini coeficient can hide a lot of inequality information
-political consequences: ruse if extreme right
-populism: anti-elitism/ anti-pluralism
- Too much inequality has negative impacts on the economy as a whole
- But too little inequality might be harmful e.g. measures to make tax system