IBE316-2 - IBE 316 Economic Policy Stiglitz: Economics of...

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IBE 316 Economic Policy Stiglitz: Economics of the Public Sector Chapter 2: The Public Sector in the United States (*and Japan) Keisuke OTSU Sophia University FLA Spring 2008 OTSU (Sophia University FLA) IBE 316 Spring 2008 1 / 23
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Review The Economic Role of Government Most countries are mixed economies The private sectors produce goods e¢ ciently but we need the government because of market failures Government also fails OTSU (Sophia University FLA) IBE 316 Spring 2008 2 / 23
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Review Thinking Like a Public Sector Economist Key Economic Questions 1 What is to be produced? 2 How is it to be produced? 3 For whom is it to be produced? 4 How are these decisions made? OTSU (Sophia University FLA) IBE 316 Spring 2008 3 / 23
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Review Thinking Like a Public Sector Economist Four General Stages of Analysis 1 Knowing what activities the public sector engages in and how these are organized 2 Understanding and, insofar as possible, anticipating the full consequences of these government activities 3 Evaluating alternative policies 4 Interpreting the political process OTSU (Sophia University FLA) IBE 316 Spring 2008 4 / 23
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Review Thinking Like a Public Sector Economist So we want a model which depicts the basic features of the economy (simplicity is a virtue, not a vice) explains how the economy reacts to various changes in government policy OTSU (Sophia University FLA) IBE 316 Spring 2008 5 / 23
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Review Thinking Like a Public Sector Economist Positive Economics Describe the economy, and construct models that predict either how the economy will change or the e/ects of di/erent policies Normative Economics Evaluate alternative policies, weighing up the various bene²ts and costs Make use of Positive Economics OTSU (Sophia University FLA) IBE 316 Spring 2008 6 ³ 23
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Announcement Quizzes and Exams Quizzes will be open-book OTSU (Sophia University FLA) IBE 316 Spring 2008 7 / 23
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Overview of Chapter 2 Focus Questions
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This note was uploaded on 10/22/2011 for the course ECON 316 taught by Professor Keisukeotsu during the Spring '08 term at Sophia University.

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IBE316-2 - IBE 316 Economic Policy Stiglitz: Economics of...

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