EC 12. Pointers No. 8

FAQs on Chs. 10-14, and Epilogue of Backhouse

Ch. 10:

  1. What is Keynesian economics?
  1. What is the role of ‘animal spirits’ in Keynesian economics? [Try to research what Robert Shiller has written about animal spirits.]
  1. Who put forward the idea that would later be called the Keynesian multiplier? Explain this idea.
  2. Before Keynes came along, what were the most prominent theories of the business cycle?
  1. How did Irving Fisher think of the interest rate?

Ch. 11:

  1. What are the most important ideas in general equilibrium theory? What’s wrong with it?
  1. What is game theory? Is it a good alternative to general equilibrium theory? Why or why not?
  1. How is equilibrium defined in game theory? What is a Nash equilibrium?

Ch. 12:

  1. What is “welfare economics”?
  1. What is Pareto optimality?
  1. What is Kenneth Arrow’s “Impossibility Theorem”?
  1. How did Backhouse assess the contribution of welfare economics to economic thought?
  1. What is “market failure”?
  1. Explain the Coase Theorem.

Ch. 13:

  1. What is the main difference between the ideas in Keynesian economics and the so-called New Classical Macroeconomics?

  2. What are the main theories of economic growth in ‘development economics’? What is the ‘Washington Consensus’? Would the Washington Consensus be applicable or relevant to the Philippines? Why or why not?
  1. What did Hyman Minsky contribute to economics? (extra credit: not in Backhouse)

Ch. 14:

What is Austrian economics? Summarize the ideas of Austrian economics. Who are the main figures of Austrian economics? Is Austrian economics useful for understanding the Philippine economy?

Other topics (not in Backhouse):

What is the Tragedy of the Commons? Explain.

Epilogue:

  1. What is the so-called “neoclassical synthesis”?
  2. Discuss and compare the two different ideas of competition in economics? (The first is the competition as imagined and written about by Adam Smith and Friedrich Hayek; the other is competition in the sense of perfect competition in neoclassical economics.)
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