HON 272-01
Spring 2016
Political Institutions
and Processes
Economic Structures
and Processes
”Z-Variables”:
Geography, Culture, etc
 Gross Domestic Product (GDP)
 Gross National Income (GNI)
 Purchasing Power Parity (PPP)
 Unemployment
 Inflation
LAISSEZ-FAIRE CAPITALISM
 Government has no
economic role in economy
REGULATED CAPITALISM
 Government may step in
and re...
Unemployment
Lowered
Wages
Business
Investment
and Employment
Creation of
Economic Growth
 Sound fiscal policy
 Emphasis on deficit
spending
 Borrowing money
 Result?
 People have $
 Purchase goods/services...
 Politically Desirable
 New Programs = Re-Election withoutTaxes!
 Scrutinized by 1970s
 Western nations facing stagfla...
Milton Friedman
 Fiscal policy does NOT
stimulate growth
 Emphasis on monetary policy
 Justification for move to
free-m...
 Appreciation vs. Depreciation
 Fixed vs. Floating Exchange Rate
 Fixed: Stable currency; International interests
 Flo...
 Appreciation vs. Depreciation
 Fixed vs. Floating Exchange Rate
 Fixed: Stable currency; International interests
 Flo...
Political Economy HON 272 01
Political Economy HON 272 01
Political Economy HON 272 01
Political Economy HON 272 01
Political Economy HON 272 01
Political Economy HON 272 01
Political Economy HON 272 01
Political Economy HON 272 01
Political Economy HON 272 01
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Political Economy HON 272 01

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Published on: Mar 4, 2016
Published in: Education      
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Transcripts - Political Economy HON 272 01

  • 1. HON 272-01 Spring 2016
  • 2. Political Institutions and Processes Economic Structures and Processes ”Z-Variables”: Geography, Culture, etc
  • 3.  Gross Domestic Product (GDP)  Gross National Income (GNI)  Purchasing Power Parity (PPP)  Unemployment  Inflation
  • 4. LAISSEZ-FAIRE CAPITALISM  Government has no economic role in economy REGULATED CAPITALISM  Government may step in and regulate economy to safeguard individual rights
  • 5. Unemployment Lowered Wages Business Investment and Employment Creation of Economic Growth
  • 6.  Sound fiscal policy  Emphasis on deficit spending  Borrowing money  Result?  People have $  Purchase goods/services  Economy reboundJohn Maynard Keynes
  • 7.  Politically Desirable  New Programs = Re-Election withoutTaxes!  Scrutinized by 1970s  Western nations facing stagflation  Mo Money, Mo Problems?
  • 8. Milton Friedman  Fiscal policy does NOT stimulate growth  Emphasis on monetary policy  Justification for move to free-market economy  Known as neoliberalism  “Conventional wisdom” until “Great Recession” of 2008- 2009
  • 9.  Appreciation vs. Depreciation  Fixed vs. Floating Exchange Rate  Fixed: Stable currency; International interests  Floating: Fluctuating currency; Domestic interests
  • 10.  Appreciation vs. Depreciation  Fixed vs. Floating Exchange Rate  Fixed: Stable currency; International interests  Floating: Fluctuating currency; Domestic interests