IBE316-3-2 - IBE 316 Economic Policy Stiglitz Economics of...

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IBE 316 Economic PolicyStiglitz: Economics of the Public SectorChapter 3: Market E¢ ciency (part 2)Keisuke OTSUSophia University FLASpring 2008OTSU(Sophia University FLA)IBE 316Spring 20081 / 12
AnnouncementSlidesSlides are currently available at moodleGo to°FLA International Business and Economics±and look for°IBE316: Economic Policy (OTSU)±They are also available at my personal webOTSU(Sophia University FLA)IBE 316Spring 20082 / 12
ReviewFocus QuestionsWhat do economists mean when they say the economy is e¢ cient?What conditions have to be satis²ed if markets are to be e¢ cient?Why is there a general presumption that competitive markets result ine¢ ciency?OTSU(Sophia University FLA)IBE 316Spring 20083 / 12
ReviewSettingsA perfect worldperfect competitionperfect information (everybody knows the prices)no externalitiesIn order to analyze the real world, we want to analyze the perfectworld and then consider the di/erences between the twoOTSU(Sophia University FLA)IBE 316Spring 20084 / 12
Review

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