PLANNING AND PROJECT
Part 1: Basic Principles of Development
ECON 3509 A
Basic Concepts of development Planning
What is development?
Refers to a noticeable and desirable change in a state or
situation Poverty, health, lite
The influence of monetary and
fiscal policy on ADD
Short-term theory of the interest rate
Monetary policy & interest rates and ADD
Fiscal policy & interest rates and ADD
Stabalize the economy
Aggregate DD and Aggregate SS
Short-term economic fluctuations
Model: Aggregate DD and Aggregate SS
Explaining booms and recessions
Economic activity fluctuates from year to
The SR tradeoff between inflation
Why policymakers face a tradeoff between
inflation and unemployment?
Why the tradeoff disappears in the LR?
How supply shocks shift the tradeoff?
Cost of reducing infl
The money growth and inflation
Money supply and inflation
The Fisher Effect
Cost of inflation
Price level and value of money
Inflation: increase in the overall level of prices
Ultimately, everything in comparative economics-you might even say in all of
economics-boils down to a question of Property Rights. The following supplements
the discussion on pp. 1-12 of Market and State in Economic Systems.
There are thr
Comparative Economics Systems
Questions and Answers
Question #1: Chapter 1, #1
Compare the notions of private, state, and communal property rights.
a) Explain how use, income, and transfer rights would differ under these three
Inclusiveness and the Exchange of Political Support for Rent
Richard L. Carson
In this paper, governments face a trade-off between wealth creation and rent creation as sources of
political support. A low rent-seeki
Economic Growth and the Exchange of Political Support for Rent
Richard L. Carson
This paper develops a model of political support which it links to economic growth. Governments face
a trade-off between wealth creation and rent
What you will
learn in this
The determinants of
investment in greater detail
Three components of
investment: business fixed
investment, and inventory
Investment under financing
CHINA: ECONOMIC GROWTH, HISTORY AND PROSPECTS
Interpreting the Numbers.
China's growth since the start of economic reform in November, 1978 has
been phenomenal. A
and Budget Deficits
The government sector and
the budget facts and figures
will learn in
Deficit-Debt dynamics and
the evolution of Canadas
Different views of d
FIVE SHARP SHORTS
PRINCETON By many measures, the world has never been more democratic. Virtually every
government at least pays lip service to democracy and human rights. Though elections may not
be free and fair, massive
A COMPETITIVE EQUILIBRIUM WITH PRODUCT DIFFERENTIATION
Richard L. Carson
This note gives a method of determining the long-run equilibrium output of a firm operating under
imperfect competition that differs from standard method
INTERPRETATION OF STE AS AN EXAMPLE OF MERCANTILISM (OR OF STATE
What is Mercantilism?
During the 1970s and 1980s, officials of the Soviet Union routinely described their
economy as "socialist," and Western commentators routinely described it
Duration: 90 minutes
This examination has two parts. Part A has 20 multiple-choice questions, worth 40
marks. Please use the scantron sheet to record your answers to the multiple-choice
questions. Part B has 3 s
THEORY OF HISTORICAL CHANGE
NOTE: For more details. see ch. 4 of MARKET AND STATE IN ECONOMIC
This theory of historical change is due to Marx-Engels and North + associates.
(Douglass North is the 1993 co-Nobel laureate in economics).
An industry is perfectly competitive if and only if:
1. Products of different suppliers (firms) are perfect substitutes (or
homogeneous). Product differentiation which is limited in the manner indicated below is
compatible with perfect
EFFECT OF VOUCHERS
In the graph below, the government decides to subsidize a good, such as health care,
housing, or education. Generally, it has four basic choices:
1. Income or lump-sum subsidy.
2. Price subsidy.
3. Provision of good to users. Generally
The Increase of Inequality Since the Mid-1970's
Inequality has risen in Canada and in other Western countries since the mid-1970s. In particular,
there has been a widening income gap between unskilled and skilled labour and between those
with and without
ALLOCATION/EXCLUSION BY QUOTAS
There are two basic ways of allocating the use rights to goods and resources, which are
also the two basic ways of excluding individuals from these rights and of balancing
supply and demand. These are via prices and markets,
THE GROWTH OF GOVERNMENT IN MARKET ECONOMIES SINCE
WORLD WAR II
Market economies, especially Western democracies, have witnessed the
following major changes since World War II:
1. Rapid growth of real income and output per capita, which has been made poss
THE LAW OF DIMINISHING RETURNS, OR OF VARIABLE
PROPORTIONS, AND INPUT COMPLEMENTARITY
Diminishing Returns Through History
The law of diminishing returns is one of the most powerful forces shaping human history,
the nature of economic activity, and the way
Tutorial 2 Problems
1. Consider the Keynesian Consumption Function: = 600 + 0.85.
a. Plot the consumption function on a diagram.
b. A rise in household wealth increases autonomous consumption to 650.
Show the effect on the diagram in (a) above.
CLASS TAKE-HOME ASSIGNMENT
Department of Economics
Instructor: R. Carson
COVERAGE: Chs. 4, 5, and pp. 188-200 of Ch. 6.
Please do each question below. The question weights are as indicated. Use
Ke oints Students need to write detailed answers
(2*3 = 6 marks) State whether you agree or disagree with each of the following
statements. Using appropriate diagrams, explain your response.
a. Two indifference curves cannot intersect.
MARX'S SOCIALIST SYSTEM
The socialist system envisaged by Marx had the following basic features:
1. Worker control of enterprise management was considered paramount, along with
widespread political and workplace democracy. The idea of a "Communist Party,"
FIVE FEATURES OF FOREIGN TRADE IN STE
In Soviet-type economies, trade was handled on a quite different basis than in
market economies. State management of the economy included state management
of foreign trade and payments. There were five basic features