36
Lectures
30
minutes/lecture
1.
How Economists Think
This lecture identifies ways in which economists think differently about human motivations, tradeoffs, and the workings of markets. It also introduces a number of terms: microeconomics, macroeconomics, opportunity cost, marginal analysis, and more.
1.
How Economists Think
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19.
Macroeconomics and GDP
Macroeconomics has four policy goals—economic growth, low unemployment, low inflation, and sustainable trade deficits—and two main tools: federal budget policy and monetary policies of the Federal Reserve. Gross domestic product (GDP) is the standard measure of a nation's economy.
19.
Macroeconomics and GDP
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2.
Division of Labor
The division of labor means that almost no one produces all or most of what they consume. Since Adam Smith over 200 years ago, economists have explained how the combination of a division of labor and exchange of goods and services increases productivity.
2.
Division of Labor
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20.
Economic Growth
In the long run, the rate of economic growth is by far the most important factor in determining the average standard of living. The key factors behind economic growth are increases in physical capital, human capital, and technology, all of which depend upon a supportive market environment.
20.
Economic Growth
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3.
Supply and Demand
Any market involves both buyers, or "demand;" and sellers, or "supply." The supply and demand framework predicts that markets will tend toward an equilibrium price, where the quantity supplied and the quantity demanded are equal.
3.
Supply and Demand
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21.
Unemployment
The economist's view of unemployment focuses on why supply and demand in the labor market are producing unemployment. The underlying causes of unemployment can be split into two broad categories: cyclical unemployment, and the structural or natural rate of unemployment.
21.
Unemployment
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4.
Price Floors and Ceilings
Price floors, such as government support for farmers, set price minimums, while price ceilings, like rent control, set a maximum price. Both can hold prices away from equilibrium, and make demand unequal to supply. Price regulations impose costs on consumers or producers, and create inefficiency.
4.
Price Floors and Ceilings
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22.
Inflation
Inflation is an overall sustained increase in the level of prices. The inflation rate is determined by defining a basket of goods, and then tracking how the cost of that basket changes over time. Mild inflation is not a great policy concern, but higher levels can cause problems.
22.
Inflation
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5.
Elasticity
Demand for orange juice is elastic—when its price rises, consumers can switch to other juices. Demand for gasoline is inelastic—when its price rises, drivers can't switch to other fuels. Elasticity is useful in evaluating how public policies will work.
5.
Elasticity
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23.
The Balance of Trade
The trade deficit is perhaps the most misunderstood statistic in all of economics. The United States ran extremely large trade deficits in the late 1990s and into the 2000s, turning the United States into the world's largest debtor economy.
23.
The Balance of Trade
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6.
The Labor Market and Wages
In the labor market, individuals are the suppliers, businesses are the demanders, and wages are the price. This lecture examines labor markets by discussing some prominent issues, like the minimum wage and how payroll taxes for Social Security affect wages.
6.
The Labor Market and Wages
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24.
Aggregate Supply and Aggregate Demand
Economists commonly think about the macroeconomy through the model of aggregate demand and supply. It indicates how growth, inflation, unemployment, and the trade balance are related; why certain goals sometimes involve trade offs; and which macroeconomic policies to use.
24.
Aggregate Supply and Aggregate Demand
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7.
Financial Markets and Rates of Return
There is a longstanding prejudice against capital markets in western culture—after all, charging interest used to be considered a sin of usury. This lecture focuses on the demand side of the capital markets, or primarily the demand for financial capital from businesses that seek to invest in plants and equipment.
7.
Financial Markets and Rates of Return
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25.
The Unemployment-Inflation Tradeoff
Some of the biggest controversies in modern macroeconomics revolve around whether an unemployment-inflation tradeoff exists. This tradeoff, known as the Phillips curve, existed quite clearly in U.S. data from about 1950 to 1970, but then fell apart.
25.
The Unemployment-Inflation Tradeoff
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8.
Personal Investing
The supply side of the capital market is an ornate name for a more basic question: How can I get rich through financial investments? While this course is not intended to provide financial or investment advice, this lecture looks at the four major investment concerns—return, risk, liquidity, and tax status—and then considers a range of investments, and their tradeoffs.
8.
Personal Investing
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26.
Fiscal Policy and Budget Deficits
This lecture reviews the main spending and taxing components in the federal budget, surveys trends in federal budget deficits and federal debt, and explains why budget deficits exploded, contracted, and then exploded again in the last 20 years.
26.
Fiscal Policy and Budget Deficits
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9.
From Perfect Competition to Monopoly
Competition between firms falls into four categories: perfect competition, monopolistic competition, oligopoly, and monopoly. This lecture discusses these paradigms, and describes how prices, output, and profits are likely to differ in each.
9.
From Perfect Competition to Monopoly
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27.
Countercyclical Fiscal Policy
Spending increases or tax cuts can mitigate a recession, and spending cuts or tax hikes can fight inflation. In the United States, these countercyclical measures happen automatically to some extent, but some believe government should go beyond these automatic stabilizers.
27.
Countercyclical Fiscal Policy
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10.
Antitrust and Competition Policy
Antitrust refers to government policies to prevent monopoly and encourage competition. They include blocking proposed mergers between firms; forcing firms to change unfair practices; and in some cases (like AT&T in 1984) requiring large firms to be split into smaller ones.
10.
Antitrust and Competition Policy
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28.
Budget Deficits and National Saving
When government budget deficits are large and sustained, two possible effects can result. First, less financial capital may be available for private investment. Second, the United States may need to attract foreign investors. In the long term, neither is healthy.
28.
Budget Deficits and National Saving
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11.
Regulation and Deregulation
In some industries—like airlines, banking, and electricity—government has sought to regulate prices charged and/or quantities produced. This lecture discusses the situations when government regulation works best, and when it does not.
11.
Regulation and Deregulation
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29.
Money and Banking
Economists define money as whatever serves as the medium of exchange, store of value, or unit of account. Money's various modern definitions— traveler's checks, checking accounts, savings accounts, money market mutual funds, etc.— reveal that money and the banking system are tightly interrelated.
29.
Money and Banking
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12.
Negative Externalities and the Environment
"Negative externalities" are situations in which the buying and selling of goods creates consequences—like pollution—felt by third parties who are not part of the original transaction. Regulation can be inflexible and costly. Economists have instead proposed market-oriented policies.
12.
Negative Externalities and the Environment
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30.
The Federal Reserve and Its Powers
The Federal Reserve controls monetary policy, and has great power over the United States and even the world's economy. Yet it is run by presidential appointees and bankers, not by elected officials. Although there are plausible reasons, this remains controversial.
30.
The Federal Reserve and Its Powers
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13.
Positive Externalities and Technology
The market can produce too few "positive externalities": good things like scientific research, innovation, and education. Policy solutions for this situation include patents, copyrights, direct government support, and tax credits to industry.
13.
Positive Externalities and Technology
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31.
The Conduct of Monetary Policy
Controversies exist over exactly how the Federal Reserve should fight inflation. Should it focus exclusively on inflation, or also pay attention to such goals as shortening recessions? Should it act when stock market or housing prices may be forming a bubble?
31.
The Conduct of Monetary Policy
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14.
Public Goods
Public goods, like national defense or basic scientific research, are "nonexcludable" and "nondepletable." Potential sellers cannot exclude people from using them, and they are not used up as more people use them. Markets often do a poor job of producing public goods, so there is a case for government action.
14.
Public Goods
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32.
The Gains of International Trade
Economists are deeply supportive of foreign trade; the average person is much more suspicious. The expansion of global trade in the post-World War II period has brought large gains to the United States and to the world economy.
32.
The Gains of International Trade
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15.
Poverty and Welfare Programs
Economists have preferred anti-poverty strategies that favor cash and wage subsidies over trying to set prices low or wages high for the poor. However, recent welfare reform emphasizes another feature—that people take jobs as soon as possible.
15.
Poverty and Welfare Programs
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33.
The Debates over Protectionism
Pressures to limit imports are called "protectionism." This lecture reviews arguments for protectionism—saving jobs, protecting the environment, and others—and the reasons that most economists find those arguments less than compelling.
33.
The Debates over Protectionism
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16.
Inequality
Inequality is the gap between those with high incomes and those with low incomes. Since the late 1970s, inequality has increased in the United States. This lecture discusses the possible causes, whether some government response is appropriate and, if so, what kind.
16.
Inequality
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34.
Exchange Rates
An exchange rate is the rate at which one currency exchanges for another. Exchange rates can be considered as a (misguided) symbol of national economic virility, when in reality they are just a price for currency.
34.
Exchange Rates
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17.
Imperfect Information and Insurance
Imperfect information, such as how much to charge for auto insurance when information about the risks of auto accident is imperfect, can raise havoc with markets. It raises two issues—moral hazard and adverse selection—that are fundamental to arguments over health insurance in the United States.
17.
Imperfect Information and Insurance
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35.
International Financial Crashes
This lecture explores international financial crashes—such as those suffered by Thailand, Russia, and Argentina in recent years—and policies that may reduce their risk. But such risks will likely continue as international flows of financial capital expand.
35.
International Financial Crashes
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18.
Corporate and Political Governance
Shareholders may have trouble constraining the actions of top corporate managers and voters can have difficulty controlling politicians' actions. So skepticism is warranted about whether firms will seek efficient production, or whether politicians will act in society's best interest.
18.
Corporate and Political Governance
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36.
A Global Economic Perspective
This lecture discusses global economic prospects over the next few decades. Even with a number of potential stumbling blocks, the chances for several billion people to be far better off are extraordinary. The United States sometimes seems to fear this richer world, but it need not.
36.
A Global Economic Perspective
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24
Lectures
30
minutes/lecture
1.
From Free Markets to State Economies
In this introductory lecture, explore the variety of national approaches to managing economies and promoting better living standards. Also, begin to face the key central questions of why nations choose such approaches, the trade-offs between them, which ones work, and what lies ahead for each.
1.
From Free Markets to State Economies
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13.
Merging the Theories of East and West
There was no greater surprise in the 1990s than the sudden turn to growth in countries like India and Vietnam. See how these nations have merged theories from the West and East with their own unique histories to turn Communist and state-dominated economies into rapidly growing economies.
13.
Merging the Theories of East and West
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2.
A Brief History of Economic Growth
Grasp long-standing patterns of world and national growth and learn to meaningfully compare success and failure across nations and time. You begin with a brief history of economic growth around the world, with a focus on the pioneering work of its greatest chronicler, Angus Maddison.
2.
A Brief History of Economic Growth
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14.
Lessons about Economic Success
Take stock of what you've already learned by synthesizing five key lessons about the roots of economic success, examining issues like the pace of free trade and openness, investment, confidence, courage in reforming, and sustainability.
14.
Lessons about Economic Success
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3.
Economic Growth and Human Behavior
Here, you begin to focus on microeconomics, learning how strategies and policies can influence an individual's decisions about investment, production, and exchange to generate economic value.
3.
Economic Growth and Human Behavior
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15.
The Roots of Economic Failure
Economies that fail can provide lessons, too. Embark on a multilecture exploration of what those failures teach us by looking at the causes and effects of not saving or investing, as well as macroeconomic mismanagement, plutocratic strategies, local anticompetitive policies, and geographic hurdles.
15.
The Roots of Economic Failure
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4.
The Birth of the Western Free Market
With the basics of growth now in hand, you're able to see how the Industrial Revolution ignited that process in the Western world, as well as how the writings of Adam Smith influenced for centuries after how we think about economics, the role of the state, and commerce.
4.
The Birth of the Western Free Market
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16.
Politics, Statecraft, and the Fate of Economies
Although economic theories tend to ignore problems of exploitation or the interests of hegemonic powers, their impact on economies can be profound. Gain a grasp of the role that "noneconomic theories" play in determining which nations win and which ones lose.
16.
Politics, Statecraft, and the Fate of Economies
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5.
American Economic Strategies
You learn that while the United States is seen as a hallmark of free markets, its approach is actually a complex mix of state- and market-led strategies. You examine in particular how policy choices made during the recent crises may affect our future.
5.
American Economic Strategies
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17.
Corruption and Its Impact on Growth
Corruption exists everywhere, but its substance—and impact in stifling growth and economic development—can vary widely. Gain insight into how corruption differs across borders and why it matters, as well as the challenge of combating something so hard to define, observe, or measure.
17.
Corruption and Its Impact on Growth
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6.
America and Europe—Divergent Approaches
U.S. and western European economic strategies sharply diverged after World War II, particularly with regard to state involvement and social goals. Examine those diverging approaches, learning how their subsequent economic and social effects have informed economic theory and shaped current beliefs about which approach is better.
6.
America and Europe—Divergent Approaches
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18.
Informal, Inefficient Markets
While open-air markets and small informal stores might be seen as cultural flavor, they often indicate an economy overburdened with regulations, business taxes, and other challenges to small business growth. Learn how they amount to a rejection of the state's "value proposition," lowering productivity and deterring growth.
18.
Informal, Inefficient Markets
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7.
State-Led Theories of Economic Growth
Dive into the details of "state-led" miracles of growth in economies as different as Japan, Soviet Russia, and China. Conclude with an examination of the risks and downsides of state-led growth and the enduring lessons of the "Japanese miracle."
7.
State-Led Theories of Economic Growth
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19.
Technology and the Instant Economy
Explore the profound effects of communications technologies on trade, labor markets, and the interconnectedness of financial markets, eradicating traditional barriers of time and distance across economies. Also, learn how a reality once only theorized brings with it not only opportunity but challenges and vulnerabilities, as well.
19.
Technology and the Instant Economy
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8.
The Secrets of Rapid Growth in Tiger Economies
The remarkable rise of the "Asian Tigers"—South Korea, Hong Kong, Singapore, and Taiwan—in the 1960s and '70s offer great hope for developing nations. But you learn that their methods and "secrets" often differ from popular recollection and don't always apply.
8.
The Secrets of Rapid Growth in Tiger Economies
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20.
Possible Strains on Global Economic Growth
Has the pace of modern growth made the Malthusian nightmare more likely or less so? Examine the potential for exhausting our supplies of oil, drinking water, and arable land; the impact on nations; and whether globalization requires some nations to be left behind.
20.
Possible Strains on Global Economic Growth
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9.
Lessons and Limits of Japan's Economic Model
Why did the "Japanese miracle" come to such a crashing end, and what does it mean for the world? You delve deeply into the meaning of Japan's decade-plus recession, learning how state-led approaches to economic management—and their favor in emerging economies—were dramatically affected as a result.
9.
Lessons and Limits of Japan's Economic Model
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21.
Latin America—Moving Away from Free Markets
Despite their many successes, including those in China and India, free-market approaches have weakened significantly in the past two decades, particular in Latin America. Examine the roots of this dissatisfaction and how the region's left-leaning strategies might affect regional growth.
21.
Latin America—Moving Away from Free Markets
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10.
From Closed to Open Economies
A small economy today is not necessarily a long-term sentence. Analyze the amazing growth of India and China at both the macro- and microeconomic levels and gain fresh insights into how both managed to initiate rapid growth.
10.
From Closed to Open Economies
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22.
Financial Crises and Economic Theory
What are the implications of the global economic crisis of 2008–2009? Look at the hard questions raised by that crisis and the financial market interconnectedness blamed by many, including whether current economic theory is up to the challenges of this new order.
22.
Financial Crises and Economic Theory
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11.
How Can We Manage Global Growth?
Does global growth need to be managed? Get closer to an answer by examining how spectacular growth in China, India, and other regions of the world led to imbalances, catching the world's financial markets unprepared for just how "flat" the global economy had become.
11.
How Can We Manage Global Growth?
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23.
The Multipolar Economic World
How will economic and financial power shift in the second decade of the 21st century? Analyze the emerging shift toward a multipolar global economy—with China's economic influence waxing, for example, while America's wanes—and its implications.
23.
The Multipolar Economic World
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12.
China's Policies and the World Economy
The most important economic event for the history of the 21st century has almost certainly already taken place. This lecture lays out the ways in which China's astonishing growth from 1978 to the present has affected the rest of the world economy and what its future growth will mean for the global economic structure.
12.
China's Policies and the World Economy
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24.
Driving Forces, Emerging Trends
Gathering the threads of the previous lectures, pull together all you have learned to arrive at a strengthened understanding of the driving forces in economic growth, the trade-offs that all economies have faced, and the future of the world's major economic theories.
24.
Driving Forces, Emerging Trends
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