9:16:19.docx - Political Economy Approaches 1 Politics and economics are inextricably linked a Political inputs and economic outcomes b Economic inputs

9:16:19.docx - Political Economy Approaches 1 Politics and...

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Political Economy Approaches 1. Politics and economics are inextricably linked a. Political inputs and economic outcomes b. Economic inputs and political outcomes c. Examples? i. Great Depression and the New Deal ii. Declining manufacturing industry in the US influences politics iii. Oil facilities bond in Saudi Arabia influencing the certainty/ uncertainty of supply of oil iv. Lax mortgage regulations led to housing crisis/ broader global financial crisis 2. Comparing countries economically a. Wide variety of measures of economic performance b. Common ones are GDP, GNI, per capita, PPP measures, and distributive measures i. GDP- total of everything made and provided within the borders of. A country ii. GNP- everything made and provided a service of companies headquartered in the country iii. Purchasing Power Parable- assessment of how much things cost in the country where things are produced c. Benefits and detractions of different measures? i. GDP per capita 1. Per capita measure divides total economy of a country by a population a. Very rich drag up the GDP b. Often much lower median income and PPP ii. Median income doesn’t give overall robustness of an economy iii. Distributive measures- what you can get for a certain amount of money iv. Big Mac Index 1. Compared cost of Big Mac across as many countries as possible 2. Cheap a. Very limited picture i. Underrepresented b. Status symbol in some lower-income countries i. More expensive relative to US 3. Theoretical frameworks a. Liberalism i. Adam Smith, David Ricardo ii. The Invisible Hand of the Market 1. Coined by Adam Smith 2. Markets will match each other in supply and demand if government isn’t involved a. Equilibrium
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  • Spring '12
  • Davidson-Schmich

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