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Lecture notes Days 1 - 4

Lecture notes Days 1 - 4 - Lecture Notes Introduction to...

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Lecture Notes Introduction to Macroeconomics Econ 104 Day I: Introductions Economics Statistics for First Day of Class 8.5% (Unemployment) 3% (Inflation) ~1.5% (Growth rate) 13.1 million (# unemployed) 60% (Labor force participation rate) 15.3% (U-6…Alternative Labor Market Utilization Rate) 15.2 trillion dollars (Size of the GDP in the U.S.) (per person $46,000) 15.2 trillion dollars (Size of the National Debt) 1.1 billion (Size of U.S. Deficit) (Bigger in 2009 – 1.4 billion) 8.6% (Deficit as a percent of the GDP) (Bigger in 2009 – 10.1%) 46.2 million (people in U.S. living in poverty) 15.1% (Percentage of people living in poverty) 1.9 million (# of families who started the home foreclosure process in 2011) (2.5 million in 2010) Things to think about….knowing what the statistics are, how they are determined, and what they mean. Macroeconomics is about the choices we make about the economy in general…when do we act collectively (via some government) to achieve different (better?) outcomes than those of the market. “When the market talks, how much do we talk back?” Day 2: Economics as a Social Science, Macroeconomic Issues and Problems Economics: Production, Distribution, and Consumption of goods and services As a social science, we look at history and current activities…we focus on the material, the stuff. Economic Theory – the method of economics, “scientific” Assumptions – IF. We love assumptions. Relevance of Economics Controversy/Difference Macroeconomics: Operation and health of an entire economy - The branch of economics concerned with large economic aggregates such as GDP, total employment, overall price level, and how these aggregates are determined. Important in economic theory since WWII. Microeconomics: concerned with the activities of small economic units, households, firms, and especially markets. International Economics: Deals with economic relationships on a global scale. Economics – explain what can be measured, ( empirical ) or reasoned, develop theories about 1
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“purely” economic relationships. “Objective” Political Economy – concerned with the relationships of the economic system and institutions to the rest of society, sensitive to politics, social institutions, morality, ideology. Paradigms: structures of thought about certain aspects of nature, life, society. Change overtime, as a dominant paradigm is replaced with a new one. Can explain the same events and facts in different ways. Orthodox (Neoclassical) economics – accepts the economic system, capitalism, as it is and explains it. Marxian Economics (Political Economy) – is critical of the economic system, capitalism, and wants to change it. Institutional Economics – bridges the two, looking at institutions and power in the economy. Ideology: a set of ideas and beliefs that tend to, morally, justify a set of economic and social relationships. Different ideologies: Confucianism Maoism Catholicism Individualism Conservatism Liberalism Neoliberialism Materialism Conservative Economics : Capitalism is best, if you let it be.
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Lecture notes Days 1 - 4 - Lecture Notes Introduction to...

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