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EC350 Introduction January 19, 2007

EC350 Introduction January 19, 2007. Course Website. http://cstl-hcb.semo.edu/rsummary/ec350.  “Modern market societies use force, tradition and authority as well as markets.” (quote from page 2 in textbook) What are some examples of force, tradition and authority? 

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EC350 Introduction January 19, 2007

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  1. EC350IntroductionJanuary 19, 2007

  2. Course Website • http://cstl-hcb.semo.edu/rsummary/ec350

  3.  “Modern market societies use force, tradition and authority as well as markets.” (quote from page 2 in textbook) What are some examples of force, tradition and authority?  • Force = illegal drugs, prostitution and gambling.  Another instance of force may include war. • Tradition = inheritance laws • Authority = government involvement, fiscal and monetary policy, regulation

  4. What is meant by "orthodox economics?" • There is not complete agreement • Maximization subject to constraints • Neoclassical economics (micro) • Keynesian economics (macro) • Monetarism (macro) • Models based on equilbria • What you learned in EC215 and EC225

  5. Heterodox economics includes those not in the mainstream, such as Austrian, Marxist, Institutionalists, Post-Keynesian • The difference between heterodox and orthodox is generally one of focus – for example, orthodox generally takes external factors (e.g., social, political) as given, while heterodox may wish to examine those external factors

  6. Heterodox Economics • http://www.hetecon.com/ Het Portal • http://www.heterodoxeconomics.net/ Het Society • http://l.web.umkc.edu/leefs/htn.htm Het newsletter

  7. Economic Methodology • How do economists think?

  8. Normative v. Positive Economics • The Art of Economics – blends positive and normative for policy purposes

  9. Inductive Reasoning • Using specific propositions to infer general propositions • This ice is cold therefore all ice is cold • This crow is black therefore all crows are black • I hang pictures from nails therefore all pictures hang from nails • The premises may predict a high probability of the conclusion, but do not ensure that the conclusion is true. • Induction occurs when we gather bits of specific information together and use our own knowledge and experience in order to make an observation about what must be true. • Inductive reasoning is empirical.

  10. Deductive Reasoning • The conclusion is necessitated by, or reached from, previously known facts (the premises). • If the premises are true, then the conclusion must be true. • Socrates is a man. All men are mortal. Therefore, Socrates is mortal (valid) • A cardinal is a bird. All birds have wings. Therefore a cardinal has wings. (valid) • Every criminal opposes the government. Everyone in the opposition party opposes the government. Therefore, everyone in the opposition party is a criminal. (invalid) • Deductive reasoning is logic

  11. Our Framework of Analysis • What are the questions that the writer is asking? • What are the assumptions that the writer is making? • What is the economic/political/cultural/social environment of writer? • What is the role of the market? • What is the role of the government?

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