It isn’t just the price of rice that keeps the poor poor. It’s the oli-cartels, the land use rules, the dysfunctional educational system, even the labor law. There is much to do, and mega-infra is just a small part (but perhaps lucrative).
FAQs on Chs. 10-14, and Epilogue of Backhouse
- What is Keynesian economics?
- What is the role of ‘animal spirits’ in Keynesian economics? [Try to research what Robert Shiller has written about animal spirits.]
- Who put forward the idea that would later be called the Keynesian multiplier? Explain this idea.
- Before Keynes came along, what were the most prominent theories of the business cycle?
- How did Irving Fisher think of the interest rate?
- What are the most important ideas in general equilibrium theory? What’s wrong with it?
- What is game theory? Is it a good alternative to general equilibrium theory? Why or why not?
- How is equilibrium defined in game theory? What is a Nash equilibrium?
- What is “welfare economics”?
- What is Pareto optimality?
- What is Kenneth Arrow’s “Impossibility Theorem”?
- How did Backhouse assess the contribution of welfare economics to economic thought?
- What is “market failure”?
- Explain the Coase Theorem.
- What is the main difference between the ideas in Keynesian economics and the so-called New Classical Macroeconomics?
- 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?
- What did Hyman Minsky contribute to economics? (extra credit: not in Backhouse)
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.
- What is the so-called “neoclassical synthesis”?
- 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.)
Prepare, individually, short written answers to the following questions, and submit them to me by e-mail (firstname.lastname@example.org) on or before February 17, 2015. Most of the answers can be found in Chapters 8, 11, 12 and 13 of the Backhouse textbook. You should also do some independent research using other sources.
Please bring hard copies for your classmates and me when we discuss the answers in class on February 18.
1.Summarize the ideas of Austrian economics. Who are the main figures of Austrian economics? Is Austrian economics more or less useful for the Philippine economy?
2.Where is Hayek in the context of Austrian economics? What did he propound? In his debate in the 1930s with Keynes, what diametrically opposed conclusions did Hayek and Keynes have? Explain why they disagreed with each other.
3.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?
4.Where would you locate Schumpeter’s work in the history of economic thought? Is it a better alternative to Keynesian economics?
5.[extra credit only] What is game theory? Is it a good alternative to general equilibrium theory? Why or why not?
USEFUL REFERENCES (apart from Backhouse):
In a sense it’s the fault of the pakialameros who find a way to make kurakot.
Gerry Sicat also thinks ‘inclusive growth’ is just another fad. The hard work of economic growth is a battle between the powerless and the powerful where the latter have found a way to rig the rules against the former. Here’s what he thinks led us astray:
“Controls, tariffs, administrative processes all combined to encourage “rent-seeking” activities. These occurred because most productive efforts required government permits to be undertaken.
Monopolies, oligopolies, and political controls often resulted in incentives for bureaucrats to add their own “demands” as approving authorities to the costs of the processes. Moreover, these also led to enormous artificial scarcities.”
Here’s another answer to the question. It says we’re poor because we are “bad”: we have no discipline, we tolerate bad leaders, etc. etc. Therefore, to get rich we should change ourselves.
Unfortunately, it’s not quite the right answer. We can be good, in that sense that will make Santa Claus bring us Christmas, but still we will remain poor.
Why is that?
While researching on how students can cheat a multiple-choice test, I came across a bit of wisdom about the quality of teaching.
The idea is that what matters a lot is the class room experience. How the teacher interacts with his/her students has amplified effects on how well the students learn.
According to this view, we are no longer poor. We are “middle-income.”
And if we want to be rich, we should let Koreans own/run our airports because many tourists are Korean. And our entertainment industry should partner with Korean entertainers.
Believable? Only Ripley knows.