Lecture Notes 2

Lecture Notes 2 - 28/03/11 Macroeconomics: Employment,...

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28/03/11 Macroeconomics: Employment, Inflation and Growth How much should the Government intervene in these macroeconomic issues 1946: Employment Act Unemployment: o Frictional unemployment: short-term unemployment, people searching for jobs, time period in between jobs o Structural unemployment: mismatch between jobs and worker skills, longer term issue, the structure of the economy changes so that there is a demand for different skills o Cyclical unemployment: this is the notion that over time there will be periods of boom and bust, that market economies have this built into them – should the government do anything about smoothing out periods of boom and bust? Should the public sector do something to dampen peaks and valleys of economic activity? o Seasonal unemployment: employment that varies according to conditions, depending on seasonal circumstances Classical System: Classical Economists Adam Smith: 1776 – Wealth of Nations. o Question of morality – following self interest does not compromise social good – the invisible hand leads to socially desirable outcomes David Ricardo: o Comparative advantage John Stewart Mill: o International trade, and the role demand plays in international trade Jeremy Bentham: o Utilitarianism Thomas Malthus: o Population, his basic proposition was that the earth has a set carrying capacity for the population, the earth can only support to a certain population level.
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This note was uploaded on 09/08/2011 for the course ECON 101 taught by Professor Gulati during the Spring '11 term at Columbia.

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Lecture Notes 2 - 28/03/11 Macroeconomics: Employment,...

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