Samenvatting
Summary of Economics For Political Scientists
- Instelling
- Universiteit Leiden (UL)
Summary of Economics For Political Scientists
[Meer zien]Voorbeeld 3 van de 28 pagina's
Voorbeeld 3 van de 28 pagina's
In winkelwagengesponsord bericht van onze partner
Verkoper
Volgen
Voorbeeld van de inhoud
1. Comment14 December 2019 at 12:55:54
E.g. Trump’s trade war
2. Comment
14 December 2019 at 12:55:38
Psychological factors
3. Comment
14 December 2019 at 12:59:36
Measured by government
statisticians
4. Comment
14 December 2019 at 12:57:22
Economics for Political Scientists
Usually
5. Comment
14 December 2019 at 13:06:12
GDP
Part 1 - Capitalism
6. Comment
14 December 2019 at 13:06:19 Economics: study of human behavior (under scarcity), focus on economic incentives and
Consumer spending on finished outcomes
goods • Microeconomics: study of individual incentives
• Macroeconomics: study of aggregated outcomes
7. Comment
14 December 2019 at 13:06:35 Key concepts:
Investment (only capital goods) • Nominal GDP: measured in current currency amount (not adjusted to inflation)
• Real (constant) GDP: adjusted for inflation, allows comparisons over time
8. Comment • Purchasing power parity: adjusted for difference in currency + what currency can buy, allows
14 December 2019 at 13:06:55
comparison between countries
Government spending on
• Consumer price index (CPI)
finished goods
Often confused for each other → misrepresent reality
9. Comment
14 December 2019 at 13:07:14
Economic growth: increases in natural resource discovery, physical capital/infrastructure
Exports
population, human capital, technology, law
1 2 • Short term causes: external shocks, animal spirits, fiscal policy
10. Comment
14 December 2019 at 13:07:22
3 4 GDP: measures market value of all finished goods produced within a country (annually); not
Imports
including imports, including exports
• Finished goods: will not be sold again as part of another good (e.g. cake)
11. Comment
14 December 2019 at 14:19:59 • Intermediate goods: will be used to make something else (e.g. eggs)
Arose from social unrest • Capital goods: used in production process but isn’t part of finished good itself (e.g. tools)
• Acquiring capital: poverty → affluence
12. Comment
14 December 2019 at 13:14:01 5 10 Y = C + I + G + (X - M)
Other systems: feudal,
communist, mercantilist (statist) GDP per capita: GDP/population (measure of wealth)
• Only measures material value, but this is correlated with development (hence a good indicator)
In reality, there are no pure • Weakness: does not measure inequality
economic systems; vary widely
Hockeystick diagram: graph that shows rapid, sustained growth in average living standards since
13. Comment 1700
14 December 2019 at 14:13:51 • Number of people living in extreme poverty has significantly decreased since the 1970s.
And when Berlin Wall falls, it • Interstate and intrastate inequality increased in past 1000 years
adopts capitalism and becomes 11 • But since WWI, less intrastate inequality (due to democracy/suffrage)
wealthy • Growth due to industrial revolution
12 • Economic growth correlated with the adoption of capitalist systems
13 • Experiment: Berlin (West = capitalist → wealthy, East = communist → poor)
• Poor capitalist countries due to factors such as corruption
,14. Comment
14 December 2019 at 13:16:56
Gains of labor protected from
confiscation by government or
others → more incentive to work
15. Comment
14 December 2019 at 13:17:55
Allocation of goods and services
determined by buying/selling, not
government
Key features: reciprocated,
voluntary, competition
16. Comment 14 16 Capitalism: economic system where private property, markets and firms play an important role
14 December 2019 at 13:18:48 • Based on individualism and economic incentives
Business organization that pays • Only system where elite membership depends on sustained economic performance
wages to employ people and 17 • Invisible hand: by pursuing self-interest, society is promoted (Adam Smith)
purchase inputs, to participate in 18 • Increases pace of change:
market and make a profit 19 20 • Specialization/division of labor → increased gains
21 • Encourages technological innovation (due to incentives and competition)
17. Comment • Entrepreneur: first adopter of new technology
14 December 2019 at 14:03:24 • Decreases level of input required for unit of output
More so than trying to actively • Produces winners and losers → inequality
promote society 22 • When governments interfere to protect losers → creative destruction????
23 • Democracy → capitalism (people’s choice)
18. Comment • Question: which came first?
14 December 2019 at 14:10:56 24 • Political institutions address economic challenges through non-market means
Includes both growth and death • Conditions of success:
(profit is essential) 25 • Economic: secure private property, competitive markets, non-discrimination in firm ownership
• Political: good legal system, prevent monopolies, social welfare
19. Comment
14 December 2019 at 13:23:42 Readings:
Producing more narrow range of • Economy, Society, and Public Policy (The CORE Team), chapter 1
goods/services than what you
consume, acquiring the rest
through trade
20. Comment
14 December 2019 at 13:24:23
Specialization on individual level
Historically:
- Direct government
requisitioning and redistribution
(e.g. US during WWII)
- Gifts/voluntary sharing (e.g.
families, hunt-gatherer societies)
21. Comment
14 December 2019 at 14:05:00
Machinery, equipment, and
devices developed using
scientific knowledge
(converts input into output)
22. Comment
14 December 2019 at 14:17:01
Lessen competition
23. Comment
14 December 2019 at 13:45:11
Equal political power to all
citizens + elected leaders
24. Comment
14 December 2019 at 14:04:10
Protect from external enemies,
provide welfare
25. Comment
14 December 2019 at 14:16:33
No “creative destruction”?????
, 26. Comment
14 December 2019 at 14:31:03
“Irrationality” usually due to
incomplete understanding of
incentives
27. Comment
14 December 2019 at 14:31:55
Don’t make decisions in isolation,
but in relation to others
Previously, seen only to respond
to supply/demand (no thinking
ahead)
28. Comment
14 December 2019 at 14:38:39 Part 2 - Game Theory
Self perpetuating situation. A
state or outcome that does not Economics involves interaction → opportunity (gains) + conflict (losses)
change unless outside forces a
change
Game theory: analytical tool for examining strategic interaction
26 27 • Assumptions: individuals are rational + act strategically
29. Comment
• Elements: players, feasible strategies, information and payoffs
14 December 2019 at 14:43:53
• Payoff matrix: table of payoffs associated with every possible combination of strategies for the
Everyone benefits from absence
two players
of nuclear weapons, but potential
• Best response: strategy which will yield highest payoff, given the other player’s decision
costs are too high to stop
• Dominant strategy: strategy which will yield highest payoff, regardless of other player (doesn’t
always exist)
30. Comment
14 December 2019 at 14:47:28
28 • Dominant strategy equilibrium: outcome in which every player has used their dominant
strategy
Can’t prevent consumption by
others • Self-interest can promote society (invisible hand), but not always
• External effects: costs/benefits incurred by individuals not involved in production/
consumption of product
31. Comment
14 December 2019 at 14:47:51 • Prisoner’s/social dilemma: individual incentives undermine collective interest to cooperate
Consumption by one doesn’t 29 (e.g. nuclear arms race); predicted outcome ≠ best feasible outcome
hinder consumption by others • Not due to malice, but due to poor incentive structures
32. Comment 30 31 Public goods: socially desirable products that are non-excludable and non-rival in consumption
14 December 2019 at 14:48:51 32 • Examples: national defense, clean air/water
Not simply “environment”; must • Hindered by collective action problems (social dilemmas)
be produced/maintained?? 33 • Players have incentive to free ride (less costly than contribution)
• More players = more difficult (vs two-player games)
33. Comment • Reason for government existence
14 December 2019 at 14:53:06
Benefitting from contributions of 34 Tragedy of the commons: collective action problems concerning common property goods
others (to a cooperative project) • Economic incentives → overexploitation of common property goods (e.g. overfishing)
without contributing oneself • Solutions:
35 • Repeated interaction: x
34. Comment 36 • Fewer players (easier to monitor defection, greater cost of defection)
14 December 2019 at 14:57:01 • Institutions (government interference)
Non-excludable
Rival in consumption Nash equilibrium: a set of strategies where each player’s strategy is the best response to other
players’ strategies
E.g. public land, air, water • Does not mean the best option; Nash equilibrium can involve everyone being worse off (but still
best response to everyone else)
35. Comment 37 • When there are multiple Nash equilibria: bargaining
14 December 2019 at 15:22:03 • Conflict of interest: preference for different Nash equilibria
As opposed to one-off rounds
Deviations from rationality:
36. Comment 38 • Social preferences:
14 December 2019 at 17:39:11 39 • Altruism
Hence players choose not to • Inequality aversion
defect • Biases:
37. Comment
14 December 2019 at 17:43:41
Coercion, agenda-setting,
outside options
38. Comment
14 December 2019 at 17:46:10
Caring about what happens to
other people
39. Comment
14 December 2019 at 17:46:22
Difficult to distinguish from
reputation building
Voordelen van het kopen van samenvattingen bij Stuvia op een rij:
Verzekerd van kwaliteit door reviews
Stuvia-klanten hebben meer dan 700.000 samenvattingen beoordeeld. Zo weet je zeker dat je de beste documenten koopt!
Snel en makkelijk kopen
Je betaalt supersnel en eenmalig met iDeal, creditcard of Stuvia-tegoed voor de samenvatting. Zonder lidmaatschap.
Focus op de essentie
Samenvattingen worden geschreven voor en door anderen. Daarom zijn de samenvattingen altijd betrouwbaar en actueel. Zo kom je snel tot de kern!
Veelgestelde vragen
Wat krijg ik als ik dit document koop?
Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.
Tevredenheidsgarantie: hoe werkt dat?
Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.
Van wie koop ik deze samenvatting?
Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper bellakim. Stuvia faciliteert de betaling aan de verkoper.
Zit ik meteen vast aan een abonnement?
Nee, je koopt alleen deze samenvatting voor €6,49. Je zit daarna nergens aan vast.
Is Stuvia te vertrouwen?
4,6 sterren op Google & Trustpilot (+1000 reviews)
Afgelopen 30 dagen zijn er 52510 samenvattingen verkocht
Opgericht in 2010, al 14 jaar dé plek om samenvattingen te kopen