POLS 242 Chapter Notes - Chapter 4: Invisible Hand, Joseph Schumpeter, Nordic Countries
17 Jan 2017
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Document Summary
Economic performance can be measured in many ways. Measure of income or total economic activity. Measures how much a dollar buys in a given place. Differences in access to resources (including income, power, or status) Often measured by gini coefficient (or gini index) Measures of health of the economy and opportunity for individuals. Also measured by levels of unemployment and underemployment. Key variation is market-led vs. state-led economy. Most countries have mix of market and state roles in the economy. Some countries rely more heavily on market economics. Other countries rely more heavily on state-led economy. This varies across countries and over time in each country. Theory: market efficiently allocates resources, while state impedes growth and meddling. Public officials are self-interested actors, not looking out for. Of market is best path (adam smith) Centralized planning by states quite often fails. Liberalize markets and let private sector run economy. Theory: high-quality state interventions can spur development, while low-quality states.
