I. Economics: who gets what, when and howII. Three schools of though: neoliberalism (market fundamentalism), Keynesian economics, Market socialisma. Neoliberalism: does not mention any deficiencies and elevates free market policiesi. Different from laissez faire, because neoliberalism has added on the layer of liberty, max. freedom comes when consumers can make decisions without interference from governmentii. Core Principles: 1. Say’s Law 2. Real Business Cycle Theory (explains booms and busts in society) 3. Efficient Market Theory 4. Rational expectations hypothesis 5. Free tradeb. Hayek (disciple is Milton Friedman) v. Keynesi. The core of both of their values is to ensure freedom and libertyii. Keynes: collapse of middle class is biggest threat to libertyiii. “Potato chips, wood chips, and computer chips”1. would rather live in a country that makes computer chips, because it is a sign of wealth and advancementa. Ergonic axiomb. Macroeconomics: 4 goalsi. Economic growthii. Low unemploymentiii. Low inflationiv. Sustainable trade deficits1. Sustainability goals are missing, because these goals are hard to quantify, they can also be seen as not being a part of the economics discussion2. Quality of life is not mentioned and the shrinking middle class is missinga. Keynes: father of macroeconomics, behavioral economics, and the idea that optimization needs to be balanced by resiliencyb. Neoclassical economic theory relegates national interesti. Promotes policies that favor global economic growth even if they hard the interests of the USii. American economics is based off Alexander Hamilton’s ideals1. Tariffs were promoted, if we had followed Adam Smith’s ideals we would still be a developing countrya. South didn’t like tariffs because they would have suffered punishments for exporting things like cottonb. North liked it, because it protected their marketsc. Many economists, especially in business schools, continue to teach the tenets of neoclassical economics even though they know this constitutes a fantasy version of realityi. They don’t personally believe in this thoughd. Problems with GDP as a measurement tooli. Inequalityii. Doesn’t take into account the negative effectsEnst 201 1st Edition Lecture 33Outline of Last Lecture I. N/AOutline of Current Lecture I. EconomicsCurrent LectureI. Economics: who gets what, when and howII. Three schools of though: neoliberalism (market fundamentalism), Keynesian economics, Market socialisma. Neoliberalism: does not mention any deficiencies and elevates free market policiesi. Different from laissez faire, because neoliberalism has added on the layer of liberty, max. freedom comes when consumers can make decisions without interference from governmentii. Core Principles: 1. Say’s Law 2. Real Business Cycle Theory (explains booms and busts in society) 3. Efficient Market Theory 4. Rational expectations hypothesis 5. Free tradeb. Hayek (disciple is Milton Friedman) v. Keynesi. The core of both of their values is to ensure freedom and libertyii. Keynes: collapse of middle class is biggest threat to libertyiii. “Potato chips, wood chips, and computer chips”1. would rather live in a country that makes computer chips, becauseit is a sign of wealth and advancementa. Ergonic axiomb. Macroeconomics: 4 goalsi. Economic growthii. Low unemploymentiii. Low inflationiv. Sustainable trade deficits1. Sustainability goals are missing, because these goals are hard to quantify, they can also be seen as not being a part of the economics discussion2. Quality of life is not mentioned and the shrinking middle class is missingThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.a. Keynes: father of macroeconomics, behavioral economics, and the idea that optimization needs to be balanced by resiliencyb. Neoclassical economic theory relegates national interesti. Promotes policies that favor global economic growth even if they hard the interests of the USii. American economics is based off Alexander Hamilton’s ideals1. Tariffs were promoted, if we had followed Adam Smith’s ideals we would still be a developing countrya. South didn’t like tariffs because they would have suffered punishments for exporting things like cottonb. North liked it, because it protected their marketsc. Many economists, especially in business schools, continue to teach the tenets of neoclassical economics even though they know this constitutes a fantasy version of realityi. They don’t personally believe in this thoughd. Problems with GDP as a measurement tooli. Inequalityii. Doesn’t take into account the negative