Political Science 2211E Lecture Notes - Lecture 4: Market Failure, Keynesian Economics, Liquor Control Board Of Ontario

• School: Western University
• Department: Political Science
• Course: Political Science 2211E
• Professor: Joseph Lyons

Document Summary

Lecture 4 the keynesian-welfare approach to economic policy. Keynesian-welfare approach: believes in market system, advocates some intervention to correct market failures. Market failures: when free market does not work in way it is supposed to, creates a problem that free market will not fix on its own, creates rationales for intervention to correct failure. The keynesian-welfare approach: make markets more efficient and social justice a, make markets more fair, reduce inequality, deal with social problems (homelessness, poverty, etc. ) Branches of economies: microeconomics focus on producers and consumers and individual products, macroeconomics focus on the economy as a whole, big picture issues" growth, unemployment, exchange rate, etc. John maynard keynes"s 1936 general theory of employment, interest, and money: focus on market failures at the macroeconomic level, failure of high unemployment to self-correct, free-market theory predicted unemployment would keynesian economics concerned that it would not.