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American Dilemmas Models and Economic Approaches

American Dilemmas Models and Economic Approaches. 1/24/2012. Learning Objectives. Critically analyze social problems by identifying value perspectives and applying concepts of sociology, political science, and economics;

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American Dilemmas Models and Economic Approaches

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  1. American DilemmasModels and Economic Approaches 1/24/2012

  2. Learning Objectives • Critically analyze social problems by identifying value perspectives and applying concepts of sociology, political science, and economics; • Use knowledge and analyses of social problems to evaluate public policy, and to suggest policy alternatives, with special reference to questions of social justice, the common good, and public and individual responsibility.

  3. Opportunities to discuss course content • Today- 11:45-2:00 • Wednesday- 10-2:00

  4. Paper Proposal • Due in class on 2/7 • 5% of your final Grade • Involves submitting 2 Parts • Worksheet • 2 page paper

  5. Economic Models

  6. What are Perspectives/Models • Methods that each discipline uses to understand social problems • Simplified representations of some aspect of the real world • Simplify and clarify difficult problems • Help understand what is important and unimportant

  7. Economic Models

  8. Rationalism • Cost- benefit • Cost Effectiveness • Risk assessment

  9. Cost Benefit Analysis • What is it? • How Do you Conduct it? • How do you put a value on Human life?

  10. Cost-Benefit II • Advantages • Criticisms of C-B

  11. Cost Effectiveness • How it Works • Fixed-Budget Analysis • Slot Machine strategy

  12. Cost Effectiveness II • Fixed- Effectiveness • Criticisms

  13. Risk Assessment • What is it? • How does it Work? • What are its' criticisms? • Overestimating error • Lowering Risk is Expensive

  14. Rational/Public Choice A Cross-over Model

  15. Rational/Public Choice • The application of economic analyses to public policymaking • In economics, people pursue their self-interests in the market. • In policy you try to maximize your personal benefits

  16. Public Choice Actors • Can be applied to any unit of analysis (state, person, interest group, etc) • People will join collective organizations when it benefits them.

  17. Political models

  18. Incrementalism • Select policies based on the existing order. • Policy is a continuation of past government activities with only incremental modifications • A policy conservative and expedient way of making change. • Downsides?

  19. Political Feasibility • What is it • How Does it work

  20. Economics The Dismal Science

  21. Economics • Fiscal Policy • Monetary Policy

  22. The Economy as a series of sectors

  23. The Modern U.S. Economy • A Shift Away from the First Two Sectors • A Service Based Economy • Affluent service jobs • Welfare service • Service Jobs

  24. The Economy as a series of “Collar” Jobs • White Collar • Blue Collar • Pink Collar • Green Collar Collar does not always equate with income

  25. Who Does it Economic Policy Makers

  26. Key actors in Economic Policy • We do not have a single economic policy • The federal government is the key player here, why? • The Power to Tax • Regulate foreign trade • Coin Money and set its value

  27. States and municipalities are also Big Players • They can also tax • They can provide incentives for economic growth • Provide services for its residents

  28. Economic Growth: Goal #1 • An Increase in the GDP each year • More Money means more tax revenue • uncontrolled growth, however, is not a good thing

  29. Historical GDP Change

  30. Low Unemployment: Goal 2 • What is Unemployment • Who does this Exclude? • What it doesn’t measure?

  31. The Positive aspects of Low Unemployment • More Tax Revenue • Fewer people receiving benefits • Lower Crime

  32. Unemployment in U.S.

  33. Our Unemployment compared to other Nations • Historically, it has been much lower • Even in our poor economy, it is lower than the EU region

  34. The Decline of Labor Unions

  35. The Economic and Political Effect of Unions • Union Workers earn 10% to 15% than non-union workers in similar occupations • A large player in “special interest” politics

  36. Why the decline in Organized Labor • The Growth in “RTW” States • The decline in manufacturing jobs and large factories • Globalization of the economy • Government has assumed many of labor’s roles

  37. Economic Goal 3: Low Inflation • What causes inflation? • The Government wants low levels of inflation, why?

  38. The Consumer Price Index • What it includes • What it excludes • How it has changed over time

  39. Goal 4: A positive Balance of Trade • A Nation Wants to Export more than it Imports • The United States is the reverse

  40. The Big Mac Index • A way of measuring the strength of the dollar • Big Mac’s involve a fixed product • What it involves • http://www.youtube.com/watch?v=sz656YOEixI

  41. Big Mac Index

  42. Our Trade Deficit

  43. Why We have a Trade deficit • Where it comes from • What are the reasons

  44. The Advantages and Disadvantages of a Trade Deficit • Disadvantages • Advantages

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