Slides

1. POL 302
Spring 2018

4. Political Institutions
and Processes
Economic Structures
and Processes
”Z-Variables”:
Geography, Culture, etc

7.  Gross Domestic Product (GDP)
 Gross National Income (GNI)
 Purchasing Power Parity (PPP)
 Unemployment
 Inflation

10. LAISSEZ-FAIRE CAPITALISM
 Government has no
economic role in economy
REGULATED CAPITALISM
 Government may step in
and regulate economy to
safeguard individual rights

11. Unemployment
Lowered
Wages
Business
Investment
and Employment
Creation of
Economic Growth

13.  Sound fiscal policy
 Emphasis on deficit
spending
 Borrowing money
 Result?
 People have $
 Purchase goods/services
 Economy reboundJohn Maynard Keynes

14.  Politically Desirable
 New Programs = Re-Election withoutTaxes!
 Scrutinized by 1970s
 Western nations facing stagflation
 Mo Money, Mo Problems?

16. Milton Friedman
 Fiscal policy does NOT
stimulate growth
 Emphasis on monetary policy
 Justification for move to
free-market economy
 Known as neoliberalism
 “Conventional wisdom” until
“Great Recession” of 2008-
2009

18.  Appreciation vs. Depreciation
 Fixed vs. Floating Exchange Rate
 Fixed: Stable currency; International interests
 Floating: Fluctuating currency; Domestic interests