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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

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