Political Economy of Demand

O hard to deal with public goods cant keep you out or

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Unformatted text preview: conversion in power plants, cheap feedstock for chemicals. o Why should we disrupt the markets? Sell it to Japan/Europe? Disrupt Russian hegemony. Take away energy is policy weapon. o Set the foundation for stable markets in Europe. • Arguments in favor of not disrupting. o Increase $ that US pays. o Lobbying on hill. o Political aspect. o Might make shale gas production increase further. o Domestic advantage – if you were advising a developing country what to do with gas, you would say, before you export to neighbors can you add value domestically. Employ people? Diversify exports? o Only country having this crisis with us is Israel. o Are interests and how to prioritize is not clear. o All our assumptions are that we want to buy , but now we want to sell. • Market Failure: When do Markets Perform Poorly? o Markets deal poorly with the side effect. • Market Failures o Public goods. o Excludable / rivalry (is it zero sum) – 2 axes. o Markets work really well with private goods. o Public goods – if you don’t play by the rules, I can lock...
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