GWLecture1F - Part IIa: Paper 1 General Equilibrium and...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Part IIa: Paper 1 General Equilibrium and Welfare Economics Dr Marco van der Leij Lecture 1F
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Course Aims To show how to analyse problems in a general equilibrium as opposed to a partial equilibrium framework To use this GE framework to address issues in international trade. To give an idea of when different sorts of economic analysis are appropriate To develop appropriate measures of welfare, and to use those concepts of welfare in evaluating outcomes
Background image of page 2
Outline 1. The use of GE analysis: comparative advantage. Robinson Crusoe Model; Edgeworth box 2. Excess demand functions, Existence, Uniqueness and Stability. 3. Solving general equilibrium models. Production in general equilibrium. Hecksher-Ohlin theory 4. Welfare Effects of trade, tarriffs, inequality. 5. Concepts of welfare. Social welfare functions. 6. Efficiency. Fundamental Theorems. 7. Sources of Market Failure. Public goods. 8. Externalities.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Today: General equilibrium vs. Partial equilibrium Comparative advantage vs absolute advantage in driving trade Book: Krugman & Obstfeld, Ch. 3
Background image of page 4
Partial equilibrium analysis: Books Quantity Price Demand curve Supply curve q* p* PS CS
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Partial equilibrium analysis: Books Quantity Price Demand curve Supply curve q’ p’ CS PS
Background image of page 6
General Equilibrium
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Difference between Partial and General Equilibrium Partial Equilibrium Restrict analysis to subset of commodities and hold prices and demand for other commodities constant.
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 22

GWLecture1F - Part IIa: Paper 1 General Equilibrium and...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online