Purpose, concepts and issues

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Session 1

• Purpose, concepts and issues

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Purpose of the unit

• To understand some of the major ways of thinking
  that influence economic management
• To increase knowledge of other countries and
  their economies
• To encourage debate about economic management
  issues

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Style of the unit

• Description of economies and economic management
• Discussion of the possible strengths and
  weaknesses of that management
• Students may use any combination of economic
  theory, history, politics or geography to gain
  understanding

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Concepts for the unit
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Economic indicators

• Size and growth
• GNP or GDP
• Change in GDP or GNP
• Wealth
• GDP per capita
• purchasing power parity
• inflation rate

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• Structure of the economy
• Sectoral shares in the economy
• Trade
• Net exports
• Balance on the current account
• Finances
• Balance on the capital account
• Proportion of Government spending
• Proportion of private spending

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Possible Growth Factors

• Population benefit or problem?
• Natural resources or innovation or both?
• Cheap labor or educated labor?
• Low levels of regulation?
• Government protection and incentives?
• Limited democracy?

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Welfare indicators

• Increase in consumption per capita
• Government spending on welfare
• Income distribution
• Medical facilities per capita
• Literacy levels
• Longevity and child maternal mortality

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Levels of government intervention

• Taxation levels
• Regulation of private behavior
• Industry protection and subsidies
• Government ownership of industry
• Government ownership of infrastructure
• Government direction of the economy

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Belief systems and intervention

• Laissez-faire capitalism
• Social capitalism
• Social democracy
• State directed capitalism
• Socialism
• Communism

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Issues to be considered
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The triumph of capitalism?

• The End of History
• The appeal of individualism
• The power of consumerism
• The power of global capital over national
  governments
• The efficiency of capitalism
• Is it just modern US imperialism?

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Possible problems with capitalism

• Coping with creative destruction
• Unemployment amongst the low skilled
• Loss of sovereignty for governments
• Disruption of traditional lifestyles
• The race to the bottom
• Trade blocs and disputes
• Political backlashes

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From communism to capitalism

• Corruption and crime
• Absence of a capitalist legal system
• Inability of citizens to operate in a market
  system
• Outdated technology
• Degradation of natural resources
• Unwillingness to invest

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Globalism

• Mobile capital
• Communications
• The race to the bottom competition for capital
• The instability created by speculative investment
• The loss of sovereignty in small countries

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The new regionalism

• The potential of the EU
• NAFTA
• APEC
• ASEAN
• Micro-nationalism within larger regional bodies

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North vs south

• Can developing countries ever catch up?
• Are the IMF and World Bank acting appropriately?
• What is the responsibility of the wealthy
  countries?
• Will China and/or India become large economies?