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Like Hitler, Mussolini encouraged Italy’s economic recovery by

A. creating alliances with the country’s religious factions

B. creating councils to collectively weed out dissent

C. employing the population in the militarization of the country

D. supporting both a free press and a government-run propaganda machine

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Kristelle Balando
Kristelle BalandoLv10
11 Sep 2020

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1. Some people will argue against using either monetary or fiscal policy, instead of supporting a laissez-faire approach to the economy. The well-known economist Milton Friedman, for example, believed in the permanent income hypothesis and was also a monetarist. What monetary policy prescription do monetarists support? 

2.The Phillips curve shows an important tradeoff faced by economic policymakers. This tradeoff was used to point out the legitimacy of government intervention in the economy for many years.

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Economists use economic models to guide their thinking in regards explaining and predicting that which is otherwise unknown. These models are generalizations that rest on assumptions we use in creating a simplified setting, where only that which is most-pertinent is allowed to come into play directly, and at the same time, that which is not pertinent is rendered excluded by being held constant. Simply put, if you change your founding assumptions, you change the model for you have changed the simplified setting. If you change a variable that is included directly into the model, you can then assume the variable changes marginally then trace out the effects of this marginal change on the variable being explained. Similarly, If you allow a change of a variable that has been excluded, you are relaxing an assumption so you can reason out what the effects of such a change could be.

What is important to understand here, is the description I have just relayed to you describes how economists use models. It is but one example of how models are used more-generally in ALL the other sciences and social sciences. And to go a step further, it is but a description or formalization of how we in an all-inclusive sense use assumptions when we are reasoning about that which we reason about. Our assumptions are our foundations for our thoughts about all that we consider in our efforts towards understanding the world in which we live and the people, both individually and collectively inclusive of their institutions, with whom we come into contact.

Using this knowledge, describe what you think are the dangers to our thinking and actions based on our thinking of our using simplifying assumptions that are wholly untrue or are too strong, too constricting, are way too over-generalizing. Choose whatever context you wish and provide an example. Then describe why having at the very least a small measure of skepticism may be considered healthy for one's own sake and the sake of others.

Few fields of empirical economic research offer virtual unanimity of findings. Yet, independent work on the economic impact of stadiums and arenas has uniformly found that there is no statistically significant positive correlation between sports facility construction and economic development (Baade and Dye, 1990; Baim, 1992; Rosentraub, 1994; Baade, 1996; Noll and Zimbalist, 1997; Waldon, 1997; Coates and Humphreys, 1999). These results stand in distinct contrast to the promotional studies that are typically done by consulting firms under the hire of teams or local chambers of commerce supporting facility development. Typically, such promotional studies project future impact and almost inevitably adopt unrealistic assumptions regarding local value-added, new spending, and associated multipliers. They often use a regional input-output model that depends on outdated technical coefficients which are treated as invariant to shifts in supply and demand (Center for Economic and Management Research, 1991; Deloitte & Touche, 1994, 1996; KPMG, 1996; Economic Research Associates, 1996; KPMG, 1998; C.H. Johnson Consulting, 1999). The academic work on the economic impact of sports facilities and teams does not rely upon projection. Rather, it compares the local economic performance of areas with and without stadiums, arenas, and teams, controlling for other variables that affect local economic conditions. Among cross-section studies, for example, Baade (1994) found no significant difference in personal income growth from 1958 to 1987 between 36 metropolitan areas that hosted a team in one of the four premier professional sports leagues and 12 otherwise comparable areas that did not. Looking at 46 cities over the 1990-94 periods, Waldon (1997) found that higher high school graduation rates and more spending on police are what encouraged economic growth, while the presence of a major league sports team actually put a drag on the local economy. Both Baade and Waldon controlled for other factors affecting underlying trends in economic growth. Time-series studies confirm the cross-section results. Baade and Sanderson (1997), for example, found no perceptible net increase in economic activity or employment in 10 cities that acquired new sports teams between 1958 and 1993 after factoring out other economic trends affecting each area. They did observe a reordering of leisure expenditures within the cities that acquired new teams, but there was no evidence that the new sports teams brought output or employment growth to the local area. A more recent study, by Coates and Humphreys (1999), finds that new stadiums and sports teams actually reduce per capita income in the host communities. This result is consistent with a higher (negative) multiplier for the displaced leisure expenditures than for the expenditures on a new team or in a new stadium because the latter likely involve substantial leakages from the local economy to the remote residential locations of some players and team owners. The conclusion that sports teams and facilities do not stimulate economic growth is surprising to many people. With live telecasting of games, daily coverage on television news and in the sports sections of newspapers, professional sports play a huge role in U.S. culture. Yet sports teams are small businesses. Yearly average team revenues in 1999 are around $55 million in the NHL, $75 million in the NBA, $85 million in MLB and $100 million in the NFL. For a medium-sized city like St. Louis, the baseball team accounts for less than 0.3 percent of local economic activity; for a large city like New York, a baseball team contributes less than 0.03 percent of economic output. Sports teams typically employ between 70 and 130 people in their front offices. Beyond this, they hire approximately 1000-1500 day-of-game personnel who work in unskilled, low wage, temporary, part-time jobs. An NFL team is assured of playing 10 home games a year (including preseason games). At four hours of work per game, an NFL team provides day-of-game employment for the equivalent of 20 to 30 full-time, year-round jobs. As we shall see, however, it is problematic to attribute even these jobs to the sports team. Of course, the controversy about the economic impact of professional sports teams on their local economy is not just about the teams themselves, but also about how specific local restaurants, hotels, and other businesses might be affected. However, even if one assumes, optimistically, that on average people spend as much outside the sports facility as they do inside, the economic impact of sports teams in proportion to a typical metropolitan economy is diminutive. Apart from their relatively small size, there are three key reasons why professional sports teams do not promote economic development: the substitution effect; extensive leakages; and the likely negative effect on local government budgets. The analysis of these three effects that follows describes the situation when a team or a facility is new to an area. Of course, in many cases, the choice is whether or not to build a facility for a team that is already there. In such a case the incremental consumer surplus, external benefits or new spending will be considerably less. From the city's perspective, however, the opportunity cost of not building a facility with public funds may be perceived to be the loss of the team and all of its attendant benefits.

-------------------------------------------------Question

1. . The authors discuss the role of leakages in determining the impact of sports teams on the local economy. What are they talking about? Be specific so as to convince me that you read the article carefully

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