Mankiw's Ten Principles of Economics

00:40:29
https://www.youtube.com/watch?v=PXJvyHe1aZk

Sintesi

TLDRO vídeo examina a natureza da economía, enfocándose na escaseza de recursos dispoñibles e como isto inflúe nas decisións humanas. Explica que a esencia da economía é a decisión de como asignar recursos escasos e proporciona exemplos de decisións que implican trade-offs, como a elección entre traballo e lecer ou entre consumo e aforro. Tamén cubre conceptos como custo de oportunidade, destacado na elección de ir á universidade fronte a traballar inmediatamente, e o principio de pensar na marxe, onde as decisións non son absolutos senón modificacións menores nos quefaceres actuais. O vídeo fala sobre como a xente responde a incentivos, como cambios nos prezos afectan o comportamento, exemplificado co uso de gasolina e os prezos do tabaco. Ademais, explora a interacción entre mercados e gobernos, mencionando casos onde o goberno intervén para corrixir fallos de mercado ou garantir unha distribución xusta dos recursos. Finalmente, adéntrase na importancia da produtividade para determinar os niveis de vida, destacando que as economías con alta produtividade ofrecen unha mellor calidade de vida aos seus cidadáns.

Punti di forza

  • 🌍 Vivimos nun mundo de escaseza, afectando á economía.
  • ⚖️ Todas as decisións implican trade-offs ou sacrificios.
  • 💡 O custo de oportunidade é crucial para a toma de decisións.
  • 🔍 Pensar na marxe axuda a optimizar pequenas decisións.
  • 🎯 Os incentivos afectan notablemente o comportamento humano.
  • 🛡️ Os gobernos interveñen para corrixir fallos de mercado.
  • 👥 A interacción entre decisións individuais e sociais é complexa.
  • 🔄 O comercio pode beneficiar a todas as partes involucradas.
  • 📈 A produtividade determina a calidade de vida das nacións.
  • 🛒 Os mercados organizan eficientemente a actividade económica.

Linea temporale

  • 00:00:00 - 00:05:00

    O vídeo comeza co concepto de escaseza e como a economía xira en torno á toma de decisións para asignar recursos limitados. Alfred Marshall define a economía como o estudo da xente na vida cotiá, destacando que decisións tan variadas como casar ou ter fillos tamén son económicas, xa que implican a asignación de recursos como diñeiro e tempo.

  • 00:05:00 - 00:10:00

    As decisións implican compensacións, como o equilibrio entre traballo e lecer. Exemplos disto inclúen as eleccións que un estudante universitario debe facer sobre como usar o seu tempo, e decisións políticas sobre como asignar presupostos de defensa fronte a bens de consumo. A necesidade de escoller entre limpezas ambientais e empregos en industrias contaminantes exemplifica outros dilemas económicos ás que se enfrontan as sociedades.

  • 00:10:00 - 00:15:00

    Abórdase o custo de oportunidade, exemplificado por unha estudante universitaria e un deportista estrela. O custo de asistir á universidade pode ser alto para alguén con oportunidades lucrativas sen necesidade de máis estudos. O custo de algo é o que se renuncia para obtelo, o que tamén se aplica á xestión do tempo.

  • 00:15:00 - 00:20:00

    A análise marxinal involucra a consideración de pequenas variacións nas decisións en lugar de cambios drásticos. Exemplos inclúen un estudante universitario axustando horas de traballo e teatro vendendo entradas con desconto para encher asento baleiros. As decisións óptimas prodúcense cando o beneficio marxinal supera o custo marxinal.

  • 00:20:00 - 00:25:00

    As persoas responden a incentivos, influíndo isto na política pública e na economía. O prezo da gasolina afecta as eleccións de vehículos, e impostos menores incentivan as compras. As políticas fiscais e os incentivos afectan o comportamento, pero poden ter consecuencias non desexadas, como a seguridade viaria ou o aforro para a xubilación.

  • 00:25:00 - 00:30:00

    O comercio fai que todos melloren, xa que as economías crecen mediante a especialización e o intercambio. Os mercados permiten a asignación eficiente de recursos a través de prezos que axustan oferta e demanda. Adam Smith introduciu a idea da "man invisible" que guía o mercado cara resultados desexables.

  • 00:30:00 - 00:35:00

    O goberno ás veces pode mellorar os resultados do mercado en casos de fallos de mercado, como externalidades ou monopolios. Exemplos de intervencións inclúen regulacións medioambientais e políticas para promover a equidade económica. O papel do goberno é abordar os fallos de mercado e distribuír a riqueza de maneira máis equitativa.

  • 00:35:00 - 00:40:29

    O nivel de vida dun país está ligado á súa produtividade. A educación e a liberdade económica son claves para aumentar a produtividade. Os prezos soben cando os gobernos imprimen demasiado diñeiro, creando inflación, mentres que unha política monetaria estable axuda a controlar a inflación. O trade-off entre inflación e desemprego, coñecida como a curva de Phillips, é un tema de debate, pero os conceptos económicos proporcionan a base para avaliar estas dinámicas económicas.

Mostra di più

Mappa mentale

Mind Map

Domande frequenti

  • Que é a esencia da economía segundo o vídeo?

    A esencia da economía é a asignación de recursos escasos a través de decisións humanas.

  • Como describe Alfred Marshall a economía?

    Describe a economía como o estudo da humanidade nos asuntos ordinarios da vida.

  • Que significa "trade-off" en economía?

    Significa que hai que elixir entre alternativas, sacrificando algo para obter outra cousa.

  • Como poden as trade-offs afectar ás decisións individuais e sociais?

    Inflúen nas decisións sobre traballo, consumo e política, como na asignación de orzamentos entre defensa e bens de consumo.

  • Que é o custo de oportunidade e por que é importante?

    É o valor da mellor oportunidade sacrificada ao elixir unha acción. É importante para comprender o verdadeiro custo das decisións.

  • Como inflúen os incentivos nas decisións das persoas?

    Os incentivos cambian as decisións ao alterar os custos e beneficios percibidos dunha acción.

  • Que é o principio de pensar na marxe?

    Significa tomar decisións considerando pequenos cambios nas accións actuais, non decisións extremas.

  • Por que os mercados son importantes segundo o vídeo?

    Os mercados son un xeito eficiente de organizar a actividade económica a través de prezos que equilibran a oferta e a demanda.

  • Cales son algunhas razóns polas que o goberno pode intervir na economía?

    Para resolver fallos de mercado, como externalidades, ou para promover maior equidade na distribución dos recursos.

  • Que relación hai entre a produtividade e o nivel de vida?

    Un maior nivel de produtividade leva a un maior nivel de vida, xa que permite producir máis bens e servizos.

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Sottotitoli
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    we live in a world of scarcity there
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    just isn't enough of anything not enough
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    money to buy everything we'd like
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    not enough time to do all the things
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    we'd like to do that means people have
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    to decide how to allocate their time or
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    money or any other resource that is in
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    scarce
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    Supply decision- making is the essence
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    of Economics all of Economics is about
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    the allocation of scarce resources and
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    resources are allocated by people making
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    decisions whe it's people deciding how
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    much to work people deciding what to buy
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    firms deciding what to sell and what
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    kind of Labor to hire it's it's all
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    comes down to decisions in the end
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    economics is the study of how societies
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    manage their resources in most countries
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    resources are allocated through
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    decisions made by millions of households
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    and firms that's why economists study
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    how people make decisions about what
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    they buy how much they work and how much
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    they save my favorite definition of
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    economics is over a century old it's
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    from Alfred Marshall from his great
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    textbook in the late 19th century
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    Marshall said that economics is the
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    study of mankind in the ordinary
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    business of life and that captures
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    economics perfectly every moment of your
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    life just about when your Waking Life is
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    involved with economics in one way or
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    the other should I get married should I
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    not get married it's an emotional
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    decision but it's also an economic
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    decision because two salaries one salary
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    child is born how much do it cost to
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    raise a child all these are economic
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    decisions how an economy behaves
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    reflects the behavior of all the
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    individuals who make up that economy so
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    let's look at some Central ideas of
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    Economics that deal with how individuals
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    make
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    [Music]
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    decisions people face
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    tradeoffs whenever any individual makes
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    a decision he's deciding between
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    alternative courses of action an
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    individual has to decide how much to
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    work for example so he pH a trade-off
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    between work and Leisure person goes to
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    the store he faces a trade-off between
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    between buying one good and buying
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    another all of our decisions at their
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    heart involve tradeoff
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    Eric Hoover is a college senior majoring
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    in Latin American studies he's hoping to
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    go to Washington when he graduates and
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    work in international relations so this
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    fall he's spending a lot of time at the
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    career Resource Center hello hi can I
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    you uh yeah I'm here for an 11:00
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    meeting okay who it with Mike Shola okay
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    as a college student Eric faces a daily
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    challenge how to allocate his precious
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    time M should he spend his time
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    researching jobs in Washington for next
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    year or should he be at the library
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    studying for an upcoming exam so when
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    you decide to do something like come to
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    the career Resource Center then you do
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    know that you're cutting out time that
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    you could be spending reading or
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    preparing for a class it's just a a
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    thing you have to prioritize about Eric
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    faces a tradeoff society as a whole also
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    faces trade-offs consider a decision
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    facing a congressman for example he has
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    to decide how much to allocate the
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    defense budget well that involves an
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    essential tradeoff for society how much
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    does society want to devote its
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    resources to National Defense guns to
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    what extent does it want to devote
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    resources to producing consumer goods
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    butter guns versus butter is one of the
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    fundamental trade-offs that all
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    societies
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    face another kind of tradeoff that
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    societies face involves the environment
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    we all want cleaner air but the tradeoff
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    can mean the loss of income or even the
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    loss of jobs for some
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    Americans the central Ohio Coal Company
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    employed about 1,200 people when coal
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    production was at its peak here in the
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    late
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    1980s but the coal from this region has
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    a high sulfur content and the federal
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    Clean Air Act restricts power plants
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    from using such coal because it produces
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    acid rain JD NYS swanger is the
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    president of the local mining started
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    happening here we had our first layoff
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    here in
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    March
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    of
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    1991 they laid off 160 people and from
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    there it's just kept going down and down
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    the mining company laid off its last
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    employees in April
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    2000 what you're seeing behind us is the
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    end of an ER when the last layoff
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    occurred uh this pit was shut down and
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    our mining operation here in this area
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    ceased the finality of it is that we're
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    we're finished is what's happened
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    because of the clean Aira it's a
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    tradeoff for cleaner air but also trades
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    off jobs and uh good good livelihood for
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    a lot of people it's what it
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    does whenever you take regulation to
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    control the environment or control
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    pollution you're incurring cost on a
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    particular society and those costs might
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    come in terms of lost jobs uh plant
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    closings mines being closed by using
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    alternative to various fossil fuels so
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    that's a trade-off you'd make in the
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    name of the
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    environment
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    [Music]
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    the cost of something is what you give
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    up to get
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    [Music]
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    it Jen nasimo is a college junior and an
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    English major she's made the choice to
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    go to college for 4 years so what's the
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    cost of her college education there's
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    the cost of tuition and the cost of
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    buying
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    books but in fact one of the biggest
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    costs of going into college is the fact
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    you to spend your time there and what
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    you're giving giving up to go to college
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    is the Lost of wages that you could have
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    otherwise earned so thinking about the
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    cost we we shouldn't think of just the
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    out of pocket cost we need to think of
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    the full opportunity cost which means
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    everything you've given up including the
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    wages from that job that you couldn't
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    take nothing comes for free our time is
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    worth something uh if you decide that
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    you're going to go to a ball game you're
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    going to give up something what are you
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    going to give up well what else could
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    you have done with those 3 hours perhaps
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    you could have worked at a McDonald's
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    and earn $15 perhaps you could have
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    written a prize-winning paper uh or
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    painted a prize-winning painting and
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    made thousands of dollars or perhaps you
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    could have had a nice cup of tea with
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    your grandmother uh there are trade-offs
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    there uh the cost of doing anything is
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    what do you give up by doing it and
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    students always need to keep that in
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    mind as they budget their
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    time the opportunity cost of going to
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    college varies for different students
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    for Jen and most students the cost is
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    relatively low since the likely
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    alternative is a low paying entry-level
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    job Julian blanks cross half court taken
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    away by Kobe Bryant who is going to go
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    the distance up and slams at
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    home but for a star High School athlete
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    like Kobe Bryant the opportunity cost of
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    going to college was much higher perhaps
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    the clearest example opportunity cost
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    comes in the case of athletes who are so
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    good they can go straight from high
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    school into the pros
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    what is the opportunity cost of going to
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    college for someone like that we'll take
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    Kobe Bryant Kobe Bryant was a star high
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    school basketball player the opportunity
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    to go into the pros for several million
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    dollars a year if he decided to go to
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    college instead he would have had to
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    give up that several million dollar a
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    year salary that's a very very large
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    opportunity cost it's not surprising
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    that athletes like that decide often not
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    to pay the opportunity cost and to go
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    straight into professional
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    Athletics rational people think at the
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    margin few decisions in life are black
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    and white most things involve some shade
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    of gray what that means is we're
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    thinking not about doing something in
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    its entirety or doing something that at
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    all but doing a little bit more here or
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    therec call that thinking at the margin
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    Jon wri is a college student who thinks
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    at the margin Jadon is a senior with a
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    heavy course load she needs a lot of
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    time to go to classes and to study at
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    the library but she also needs to make
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    some spending money so tce tce a week
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    she works for several hours at the
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    college's Alumni Office hi Mr Cohen hi
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    my name is Jon Wright and I'm calling
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    from wesling University's um annual fund
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    jadon's problem is that she doesn't
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    always have enough time to work at her
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    campus job but she doesn't have to quit
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    her job she can adjust her schedule in
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    increments I try to um see what's coming
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    up in the week and and balance those
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    things out um sometimes I may have a lot
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    of school workor to do so I may cut back
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    on my working hours and sometimes I may
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    not have that much school work to do and
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    so I'll increase my working hours Jadon
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    makes her best Decisions by thinking at
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    the margin that's what businesses
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    do General Motors other auto companies
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    do that kind of analysis all the time
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    should we produce one more car or should
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    we call it quits if we produce one more
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    car what if nobody buys it uh what if we
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    drive down the price of our own product
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    by oversupplying by creating a glut so
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    again the marginal analysis question is
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    not where have I been but where do you
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    stand now what could you do with the
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    next Dollar in your pocket with the next
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    five minutes of time that you have to a
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    lot the theater business in New York
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    City also practices marginal analysis in
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    recent years Broadway has been setting
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    attendance records but even in Good
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    Times many seats still go unsold so
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    theater owners and producers created
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    tkts it's a discount sales Outlet in
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    Time Square where theatergoers can buy
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    half pric seats a few hours before the
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    performance it's a great deal for
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    everyone the customers get a bargain and
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    the theater owners and producers
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    increase their revenues if you're a
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    theater manager I look at my house and I
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    look at the theater and I realize I've
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    only sold three quars of my tickets well
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    I'm willing to you know discount the
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    remaining quarter of the tickets because
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    I'd rather have one quarter of the price
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    or one half the price of a ticket rather
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    than have those tickets go those seats
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    go totally empty so at the margin the
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    marginal cost I'm I'm marginal revenue
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    I'm gaining is really you know the
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    choice between an empty seat or is seat
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    to at Half
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    Price economists assume that rational
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    people will only act if the marginal
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    benefit of an action exceeds the
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    marginal cost Jadon will adjust her
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    schedule so that she can make money at
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    her job and still have enough time to
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    study Broadway Theater producers will
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    price their tickets to maximize their
  • 00:11:07
    profits they'll both make better
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    decisions by thinking at the margin
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    whether it's how to manage her time in
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    jadon's case or how to price unsold
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    theater
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    seats people respond to
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    incentives since people make decisions
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    by comparing costs and benefits their
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    behavior may change when the costs and
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    benefits change people respond to
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    incentives well if I want my son to wash
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    my car I'll say if you wash the car you
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    can use it tonight that's that's an
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    incentive if I say if you wash the car
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    I'll cut your allowance he won't do it
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    as a disincentive a good example of
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    people responding to incentives is how
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    people respond to the price of gasoline
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    across countries we see very large
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    differences in the price of gasoline and
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    we observe very large differences in the
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    kinds of cars that people drive the
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    Europeans are heavily taxed on their
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    gasoline uh as a result the Europeans
  • 00:12:09
    drive very small cars they can't afford
  • 00:12:11
    to drive big cars with bad fuel economy
  • 00:12:14
    uh but in America we have relatively
  • 00:12:17
    cheap oil still and that means that we
  • 00:12:20
    are able to fly Drive pretty much
  • 00:12:23
    wherever we want at low prices in more
  • 00:12:25
    recent years when the price of oil has
  • 00:12:26
    been very low in real terms especially
  • 00:12:29
    compared to the early 1970s Americans
  • 00:12:31
    have switched back to driving really
  • 00:12:33
    large uh cars sport utility vehicles are
  • 00:12:36
    larger and often less fuel efficient
  • 00:12:38
    than the cars that Americans were
  • 00:12:39
    driving before the first oil crisis
  • 00:12:41
    which shows how much we respond to
  • 00:12:44
    incentives a few years ago the mayor of
  • 00:12:46
    New York declared a sales tax moratorium
  • 00:12:50
    said for this weekend we're not going to
  • 00:12:52
    charge taxes well that was a tremendous
  • 00:12:54
    incentive for people to do their
  • 00:12:56
    shopping that weekend and what do you
  • 00:12:58
    know the stores were flooded the Subways
  • 00:13:00
    were crowded commuters clogged the
  • 00:13:02
    bridges and tunnels from New Jersey and
  • 00:13:04
    Long Island and Connecticut just to come
  • 00:13:05
    in to do shopping people do respond to
  • 00:13:08
    incentives incentives regarding taxes
  • 00:13:11
    from the government incentives regarding
  • 00:13:13
    for sale signs uh and discount signs in
  • 00:13:17
    store Windows the powerful impact of
  • 00:13:20
    incentives on human behavior is
  • 00:13:22
    important for those who design public
  • 00:13:25
    policy smoking among young people is a
  • 00:13:27
    health problem that concerns a lot of
  • 00:13:30
    government officials one of the shest
  • 00:13:32
    ways of reducing you smoking is to
  • 00:13:34
    increase the price of
  • 00:13:36
    cigarettes today I call for a
  • 00:13:39
    combination of Industry payments and
  • 00:13:40
    penalties to increase the price of
  • 00:13:43
    cigarettes by up to a dollar and a half
  • 00:13:46
    a pack over the one of the reasons that
  • 00:13:48
    uh Congress and the president and other
  • 00:13:51
    policy makers have been pushing for
  • 00:13:52
    higher cigarette prices is that there's
  • 00:13:55
    evidence that when the price of
  • 00:13:56
    cigarettes Rises teens smoke less and uh
  • 00:14:01
    that's one of the reasons why there's a
  • 00:14:02
    lot of attention to cigarette prices
  • 00:14:05
    today uh trying to make sure that they
  • 00:14:07
    stay high enough so that teenagers are
  • 00:14:10
    uh discouraged from smoking for that
  • 00:14:12
    reason alone changing human behavior
  • 00:14:15
    through the use of incentives or
  • 00:14:17
    disincentives can be a tricky business
  • 00:14:20
    sometimes public policies can have
  • 00:14:22
    effects that officials did not intend
  • 00:14:26
    take safety belts for example safety
  • 00:14:28
    belts are now required on cars and the
  • 00:14:31
    intention of that is to save lives and
  • 00:14:33
    indeed other things being the same
  • 00:14:35
    wearing a safety belt does save person's
  • 00:14:37
    life in an accident but of course other
  • 00:14:39
    things aren't the same and there's
  • 00:14:40
    evidence that behavior does change in
  • 00:14:42
    response to the use for safety of safety
  • 00:14:43
    belts in particular people tend to drive
  • 00:14:46
    faster and generally less carefully uh
  • 00:14:49
    when they're wearing safety belts
  • 00:14:50
    because they feel safer and that tends
  • 00:14:52
    to increase accidents and offsets
  • 00:14:54
    partially and some people argue
  • 00:14:55
    completely the the direct effect of
  • 00:14:57
    safety belts many
  • 00:14:59
    government policies are like that if we
  • 00:15:01
    mandate that everyone has a government
  • 00:15:04
    pension say or that everyone
  • 00:15:06
    participates in Social Security so that
  • 00:15:08
    everyone is going to get uh retirement
  • 00:15:11
    benefits through the Social Security
  • 00:15:12
    System people are going to have less
  • 00:15:15
    incentive to save for retirement on
  • 00:15:16
    their own and that's an example of um
  • 00:15:22
    how a government policy can have the
  • 00:15:23
    unintended consequence of altering
  • 00:15:25
    people's behavior by by altering uh
  • 00:15:27
    their private incentives the first four
  • 00:15:30
    principles deal with how individuals
  • 00:15:33
    make decisions but in life many of our
  • 00:15:36
    decisions affect other people the next
  • 00:15:40
    three principles concern how people
  • 00:15:42
    interact with each
  • 00:15:47
    other trade can make everyone better off
  • 00:15:52
    one of the obvious but very important
  • 00:15:53
    features of the modern economy is that
  • 00:15:55
    people are not self-sufficient that is
  • 00:15:57
    people don't grow their own food make
  • 00:15:58
    their own clothes cut their own hair
  • 00:16:01
    people specialize people do particular
  • 00:16:03
    tasks and rely on other people to do
  • 00:16:05
    other tasks for them
  • 00:16:07
    it's really the essence of why it is
  • 00:16:11
    that economies can grow uh why it is
  • 00:16:16
    that uh markets are important why it is
  • 00:16:19
    that the whole science of Economics is
  • 00:16:21
    important the idea that you have
  • 00:16:23
    something and I have something and if we
  • 00:16:26
    exchange each one of us is going to be
  • 00:16:28
    better off is fundamentally what
  • 00:16:31
    economics is all about for example take
  • 00:16:34
    food production in the United States the
  • 00:16:37
    us enjoys the cheapest food in the world
  • 00:16:40
    but it's grown by a very small
  • 00:16:42
    percentage of the population who use
  • 00:16:44
    high technology to produce very
  • 00:16:46
    efficiently we could all grow our own
  • 00:16:48
    food in our own backyard that would be
  • 00:16:51
    quite difficult instead what we do is we
  • 00:16:53
    rely on a few people to be Farmers they
  • 00:16:55
    specialize in farming and become very
  • 00:16:56
    good at it and we buy the food from them
  • 00:16:59
    and we produce what we're particularly
  • 00:17:00
    good at that specialization allows
  • 00:17:02
    everyone farmers and non-farmers to
  • 00:17:04
    achieve a higher standard of living in
  • 00:17:05
    medieval times people were limited to
  • 00:17:08
    buying what was grown or what was made
  • 00:17:11
    in their small feudal Community uh as
  • 00:17:14
    civilization has expanded we've gained
  • 00:17:17
    the ability to buy things from all
  • 00:17:19
    around the world now as a result of the
  • 00:17:20
    internet if you want lamb chops you
  • 00:17:22
    don't just have to stick with your local
  • 00:17:24
    butcher you can go online and order lamb
  • 00:17:27
    chops directly from from Auckland New
  • 00:17:29
    Zealand uh so we've expanded the
  • 00:17:31
    boundaries of trade uh and that has
  • 00:17:34
    created a more efficient economy it has
  • 00:17:36
    given consumers far wider uh variety of
  • 00:17:40
    choices at the same time it's helped
  • 00:17:43
    keep prices under control countries as
  • 00:17:46
    well as families benefit from the
  • 00:17:48
    ability to trade with one another well
  • 00:17:51
    the basic reason countries trade is to
  • 00:17:54
    get things cheaper from foreign
  • 00:17:57
    countries than they could otherwise wi
  • 00:17:58
    make it home and to sell their products
  • 00:18:02
    which they're very good at making to
  • 00:18:04
    foreign countries for example say in
  • 00:18:06
    Mexico people are assembling TV sets
  • 00:18:08
    that's a labor intensive process not a
  • 00:18:11
    very high-tech situation in the United
  • 00:18:13
    States people are say manufacturing
  • 00:18:15
    airplanes well airplanes are a very
  • 00:18:17
    high-tech process it doesn't make sense
  • 00:18:19
    for the US to focus on making both
  • 00:18:21
    because the cost of manufacturing your
  • 00:18:24
    television set assembling them in the US
  • 00:18:26
    would be more expensive by using higher
  • 00:18:29
    priced labor source by doing it with
  • 00:18:31
    Mexico the Mexicans are able to uh focus
  • 00:18:33
    and utilize their labor Supply and a
  • 00:18:37
    labor intensive industry then ship those
  • 00:18:38
    goods across the border and exchange
  • 00:18:40
    you're able to import airplanes and
  • 00:18:42
    other products from the US that are
  • 00:18:43
    higher
  • 00:18:49
    Tech markets are usually a good way to
  • 00:18:52
    organize economic
  • 00:18:57
    activity
  • 00:18:59
    the trading floor of the New York
  • 00:19:01
    mertile Exchange is a microcosm of our
  • 00:19:04
    free market economy it's just like any
  • 00:19:07
    other Market only a lot
  • 00:19:09
    [Music]
  • 00:19:12
    noisier here deals are made prices are
  • 00:19:15
    negotiated and that price information is
  • 00:19:18
    transmitted to the outside world a
  • 00:19:21
    market is fundamentally a place in which
  • 00:19:23
    people make exchanges and when we say a
  • 00:19:26
    market we generally mean that the
  • 00:19:29
    exchanges are governed by prices that
  • 00:19:32
    prices changing are the method by which
  • 00:19:36
    uh goods and services are allocated from
  • 00:19:38
    one person to another or that prices are
  • 00:19:41
    the means by which goods and services
  • 00:19:43
    are rationed a good example of that is a
  • 00:19:45
    Wholesale Fruit Market where Farmers
  • 00:19:48
    come to sell their fruit and vegetables
  • 00:19:50
    and Supermarket owners come to buy
  • 00:19:51
    fruits and vegetables which they are
  • 00:19:53
    then going to resell on to
  • 00:19:54
    Consumers a stamp show is another kind
  • 00:19:57
    of Market that brings buyers and sellers
  • 00:20:00
    together in one place there's a lot of
  • 00:20:02
    browsing and a lot of bargaining those
  • 00:20:04
    two together can you do anything else
  • 00:20:07
    that I I already
  • 00:20:09
    did I already did I did it as we went I
  • 00:20:12
    gave you a very good deal on this stamp
  • 00:20:13
    in particular it's like the stock
  • 00:20:15
    market0 you know somebody has an ass
  • 00:20:18
    price you give a bid price and you know
  • 00:20:21
    if they're not happy with your price
  • 00:20:22
    they try to shop it around to other
  • 00:20:24
    dealers and they'll go for the highest
  • 00:20:25
    price pl r10 we call our system a market
  • 00:20:30
    economy it's made up of huge numbers of
  • 00:20:33
    markets like this one resources are
  • 00:20:36
    allocated through the decisions of
  • 00:20:38
    millions of firms and millions of
  • 00:20:41
    households firms decide what to make and
  • 00:20:44
    who to hire individuals decide who to
  • 00:20:47
    work for and how to spend their income
  • 00:20:50
    everyone interacts in the
  • 00:20:53
    marketplace the man who first tried to
  • 00:20:56
    explain how a market system works was
  • 00:20:58
    Adam Smith Smith was a brilliant
  • 00:21:01
    philosopher who lived in Scotland in the
  • 00:21:03
    18th century he published the first
  • 00:21:06
    great book about economics The Wealth of
  • 00:21:08
    Nations in
  • 00:21:11
    1776 one of the big surprises about
  • 00:21:13
    market economies is that they work at
  • 00:21:14
    all because after all market economies
  • 00:21:16
    are decentralized there thousands of
  • 00:21:18
    buyers and thousands of sellers in many
  • 00:21:20
    markets why doesn't this degenerate into
  • 00:21:22
    complete chaos well Adam Smith said the
  • 00:21:25
    markets in fact work very well he said
  • 00:21:26
    they're guided as if by an visible hand
  • 00:21:28
    that leads to a desirable allocation of
  • 00:21:30
    resources and one of the reasons to
  • 00:21:32
    study economics is to understand how
  • 00:21:33
    that Invisible Hand Works how is it that
  • 00:21:35
    buyers and sellers interacting with one
  • 00:21:37
    another in what could be a chaotic
  • 00:21:38
    chaotic setting leads to a desirable
  • 00:21:40
    outcome the invisible hand that Adam
  • 00:21:43
    Smith wrote about is the workings of
  • 00:21:46
    self-interest by individuals in the
  • 00:21:48
    economy so his assumption is that if you
  • 00:21:51
    look out for yourself and try to
  • 00:21:53
    maximize your benefits and everyone else
  • 00:21:54
    tries to do the same thing everyone wins
  • 00:21:57
    so for example example if you have a
  • 00:21:58
    Cates mitt and I have $25 let's say and
  • 00:22:02
    I want to buy this catches mitt from you
  • 00:22:03
    for $25 and you want to sell it to me we
  • 00:22:05
    both win you wanted the $25 more than
  • 00:22:08
    the MIT and I wanted the M more than the
  • 00:22:09
    $25 and that's the invisible hand that
  • 00:22:12
    works throughout the economy and makes
  • 00:22:14
    things operate how does the Invisible
  • 00:22:16
    Hand work its magic how does it lead
  • 00:22:19
    markets to a desirable outcome Well
  • 00:22:21
    turns out that prices are the key
  • 00:22:23
    instrument prices are what signal to
  • 00:22:26
    buyers how much to buy and price are
  • 00:22:28
    would signal to sellers how much to
  • 00:22:29
    produce and sell prices are in some
  • 00:22:31
    sense the Baton with which the Invisible
  • 00:22:34
    Hand conducts the economic
  • 00:22:36
    Orchestra one of the most important
  • 00:22:38
    changes in the world during the past
  • 00:22:40
    half century was the collapse of
  • 00:22:42
    Communism in Russia and Eastern Europe
  • 00:22:45
    communism failed because it replaced the
  • 00:22:48
    free market with government Central
  • 00:22:51
    planners in the old Soviet Union the
  • 00:22:54
    government decided what was produced how
  • 00:22:57
    much was produced and at what price to
  • 00:22:59
    sell it the system never really worked
  • 00:23:02
    and was abandoned they failed because
  • 00:23:04
    communism basically puts power in the
  • 00:23:07
    hands of bureaucrats how is it
  • 00:23:09
    bureaucrats are to know how much should
  • 00:23:12
    be produced if there are not price
  • 00:23:15
    signals if there's not supply and demand
  • 00:23:17
    telling producers to produce more or
  • 00:23:19
    create less then bureaucrats merely have
  • 00:23:22
    to guess one socialist Economist had
  • 00:23:25
    said well the bureaucrats can just see
  • 00:23:28
    people lining up for goods and that
  • 00:23:30
    would tell them that more needs to be
  • 00:23:31
    produced well communism certainly
  • 00:23:33
    produced long lines uh but it didn't
  • 00:23:35
    produce the goods and certainly didn't
  • 00:23:37
    produce them in an advanced State uh at
  • 00:23:40
    an economically efficient
  • 00:23:45
    price government can sometimes improve
  • 00:23:49
    Market
  • 00:23:51
    outcomes economists believe that markets
  • 00:23:54
    are a very powerful way of organizing a
  • 00:23:57
    society scarce resources but that
  • 00:23:59
    doesn't mean that market outcomes are
  • 00:24:00
    always absolutely perfect and there's
  • 00:24:02
    two essential reasons why the government
  • 00:24:04
    might intervene one is the market might
  • 00:24:06
    fail to allocate resources efficiently
  • 00:24:08
    because of some market failure or the
  • 00:24:11
    market may fail to allocate resources in
  • 00:24:13
    inequitable way so the government might
  • 00:24:15
    want to intervene either to correct the
  • 00:24:16
    market failure or to achieve a better
  • 00:24:18
    distribution of income one reason
  • 00:24:20
    markets fail to work efficiently is due
  • 00:24:23
    to what economists call an
  • 00:24:26
    externality an exter internality is when
  • 00:24:29
    a company or an individual creates
  • 00:24:32
    something that has an impact beyond the
  • 00:24:35
    immediate buyers and sellers of that
  • 00:24:37
    product if I buy a ghetto blaster and I
  • 00:24:40
    put my favorite uh tape into it and I
  • 00:24:43
    play it loudly uh I don't there I don't
  • 00:24:47
    have to pay any price uh when I play it
  • 00:24:51
    loudly in a public space for instance
  • 00:24:53
    and I affect other people's well-being
  • 00:24:56
    or I affect other people's ability to to
  • 00:24:57
    enjoy their music from their ghetto
  • 00:25:00
    blaster so uh the fact that I don't have
  • 00:25:03
    to pay anything to them means that the
  • 00:25:06
    market price that I pay for my ghetto
  • 00:25:08
    blaster and I pay for my music tape is
  • 00:25:11
    really too low compared to the societal
  • 00:25:14
    price of my enjoying um my enjoying my
  • 00:25:18
    consumption from these two
  • 00:25:20
    items air pollution is an example of an
  • 00:25:23
    externality when a power plant generates
  • 00:25:26
    electricity for example its Smoke Stacks
  • 00:25:29
    may be belching out smoke that is
  • 00:25:31
    carried for miles and miles that smoke
  • 00:25:34
    might be causing health problems for
  • 00:25:36
    people the company doesn't pay for that
  • 00:25:38
    the market doesn't force it to pay for
  • 00:25:40
    that and yet there may be people choking
  • 00:25:42
    in the streets there may be people dying
  • 00:25:43
    of empyema so there is a role for the
  • 00:25:46
    government at that point to say is there
  • 00:25:48
    any way to make the situation better to
  • 00:25:51
    make the company somehow bear the costs
  • 00:25:54
    the social costs imposed on the
  • 00:25:57
    community
  • 00:25:58
    Regulators in the economy over the last
  • 00:26:00
    30 years have tried to figure out how to
  • 00:26:02
    handle that situation another possible
  • 00:26:05
    cause of market failure is unchecked
  • 00:26:07
    Market power such as a monopoly Market
  • 00:26:11
    power occurs when one of the players in
  • 00:26:14
    a market either a firm or a person who's
  • 00:26:17
    selling his Services uh is large
  • 00:26:20
    relative to the market and is able to
  • 00:26:23
    control some part of the market and
  • 00:26:24
    manipulate prices a good example is
  • 00:26:27
    Airline hubs Airline hubs exist for a
  • 00:26:30
    very good technical reason it helps an
  • 00:26:33
    airline if it can have flights that are
  • 00:26:35
    all going out of one city because it
  • 00:26:36
    helps coordinate passengers so there's a
  • 00:26:38
    good reason for Airline hubs to exist
  • 00:26:41
    but if you live in a city say Pittsburgh
  • 00:26:44
    where a major airline has its hub it's
  • 00:26:46
    very hard to choose to fly on an airline
  • 00:26:50
    that doesn't have its hub in Pittsburgh
  • 00:26:53
    and that means that the airline that H
  • 00:26:54
    has its hub in Pittsburgh has Market
  • 00:26:57
    power and generally can set the prices a
  • 00:27:01
    little bit higher for local Pittsburgh
  • 00:27:04
    residents than it would be able to set
  • 00:27:06
    the prices if those people could choose
  • 00:27:08
    among 10 Airlines equally well or 20
  • 00:27:11
    Airlines equally well your local
  • 00:27:14
    television cable company may be another
  • 00:27:16
    example if it's the only supplier in
  • 00:27:18
    your neighborhood what that means is
  • 00:27:20
    that that cable company has tremendous
  • 00:27:22
    power over the price it charges you that
  • 00:27:24
    means that on its own the cable compan
  • 00:27:26
    is not going to charge what price would
  • 00:27:28
    would under competition but charge a
  • 00:27:29
    much higher price and that leaves open
  • 00:27:32
    the possibility of market failure and it
  • 00:27:33
    leaves open the possibility the
  • 00:27:35
    government can step in and improve the
  • 00:27:37
    situation often government does step in
  • 00:27:41
    in
  • 00:27:41
    1999 the federal government helped
  • 00:27:44
    satellite television companies become
  • 00:27:46
    more competitive with the cable
  • 00:27:48
    companies it did so by ending
  • 00:27:51
    restrictions against transmitting local
  • 00:27:54
    television channels by
  • 00:27:56
    satellite another reason government
  • 00:27:59
    intervenes in the economy is to promote
  • 00:28:01
    greater Equity or fairness our market
  • 00:28:05
    economy left on its own doesn't
  • 00:28:07
    guarantee that wealth gets distributed
  • 00:28:09
    evenly a market system rewards people
  • 00:28:13
    according to their ability to produce
  • 00:28:15
    things that other people are willing to
  • 00:28:17
    pay for professional athletes command
  • 00:28:20
    million dooll salaries child care
  • 00:28:23
    workers are often poorly paid the
  • 00:28:26
    Invisible Hand of the Market doesn't
  • 00:28:28
    ensure that everyone receives enough to
  • 00:28:30
    eat or adequate Health Care the role of
  • 00:28:33
    public policy is often I think as a
  • 00:28:34
    check on markets some people believe
  • 00:28:36
    that public policy should be uh designed
  • 00:28:39
    to promote Market activity and let the
  • 00:28:40
    market find a way to matter what happens
  • 00:28:42
    you know what going to take all some
  • 00:28:44
    other people believe that you know
  • 00:28:46
    markets because they have no conscience
  • 00:28:48
    um and they may not necessarily trust
  • 00:28:49
    individuals to make the right social
  • 00:28:51
    choices will impose various ways of
  • 00:28:54
    redistributing wealth from you know
  • 00:28:55
    taxes to promoting programs such as
  • 00:28:57
    affirmative action to setting minimum
  • 00:28:59
    wages these type of social public policy
  • 00:29:01
    programs designed to be a balancing
  • 00:29:03
    effort uh against uncheck Market power
  • 00:29:06
    the problem is when you find the market
  • 00:29:09
    making a mistake when you find a market
  • 00:29:11
    imperfection it's very tempting to say
  • 00:29:14
    well government fixed this but it simply
  • 00:29:17
    raises the question can the problem be
  • 00:29:19
    fixed how can the how can the government
  • 00:29:21
    solve the problem and that's where
  • 00:29:23
    economists over the last 50 years have
  • 00:29:25
    changed their point of view they used to
  • 00:29:28
    be more eager for the government to step
  • 00:29:30
    in and correct the problem now they
  • 00:29:32
    recognize how complex a situation it is
  • 00:29:35
    whenever the government does get
  • 00:29:37
    involved we began this video talking
  • 00:29:40
    about how individuals make economic
  • 00:29:42
    decisions we've just been looking at how
  • 00:29:45
    people interact with one another in the
  • 00:29:48
    marketplace all those decisions and
  • 00:29:50
    interactions make up the economy now
  • 00:29:54
    we'll look at the economy as a whole
  • 00:30:01
    a country's standard of living depends
  • 00:30:03
    on its ability to produce goods and
  • 00:30:06
    services differences in living standards
  • 00:30:09
    around the world are dramatic in 1998
  • 00:30:13
    the average American had a yearly income
  • 00:30:16
    of
  • 00:30:16
    $31,500
  • 00:30:18
    in Mexico the average yearly income was
  • 00:30:23
    $8,300 and in India the figure was just
  • 00:30:26
    above $1,700 a year not surprisingly
  • 00:30:31
    these differences in income are
  • 00:30:33
    reflected in the various measures of
  • 00:30:35
    quality of life Americans have more cars
  • 00:30:39
    better nutrition and longer life
  • 00:30:41
    expectancies than citizens in a country
  • 00:30:44
    like India what explains these large
  • 00:30:47
    differences in living standards among
  • 00:30:49
    nations if we compare s of the rich
  • 00:30:51
    countries and the poor countries the
  • 00:30:53
    difference that explains it is
  • 00:30:54
    productivity that is the rich countries
  • 00:30:57
    have workers that are very productive
  • 00:30:58
    they can produce a lot of goods and
  • 00:30:59
    services for every hour of work whereas
  • 00:31:01
    poor countries have workers that are
  • 00:31:03
    less productive that is they produce
  • 00:31:04
    fewer goods and services for every hour
  • 00:31:06
    of work now that raises the question of
  • 00:31:08
    course of what explains those
  • 00:31:10
    differences in productivity and of
  • 00:31:12
    course there are many different
  • 00:31:13
    explanations for that it includes things
  • 00:31:14
    like accumulation of capital includes
  • 00:31:16
    the skills of the workforce it includes
  • 00:31:19
    the openness uh the economy there there
  • 00:31:22
    are a lot of explanations for
  • 00:31:23
    productivity but whenever you want
  • 00:31:25
    explain differences between rich and
  • 00:31:27
    countries productivity is the
  • 00:31:29
    key the relationship between
  • 00:31:31
    productivity and living standards is a
  • 00:31:34
    challenge to government policies since
  • 00:31:37
    Rising productivity is critical to
  • 00:31:39
    economic well-being how can government
  • 00:31:42
    provide the best support one way in
  • 00:31:45
    which the government can stimulate rapid
  • 00:31:47
    growth in productivity is through a
  • 00:31:49
    better educated Workforce and indeed one
  • 00:31:51
    of the reasons we the government often
  • 00:31:52
    cares about education policy is because
  • 00:31:54
    of its impact on the skills of the
  • 00:31:56
    workforce which in turn influences the
  • 00:31:57
    productivity of workers down the line
  • 00:32:00
    typically uh the US Western Europe and
  • 00:32:02
    Japan are states that are very
  • 00:32:03
    economically free that they've
  • 00:32:05
    encouraged development that they've
  • 00:32:06
    encouraged entrepreneurship that they've
  • 00:32:08
    encouraged technological uh advantages
  • 00:32:11
    with relatively low levels of government
  • 00:32:13
    involvement in the economy uh in the US
  • 00:32:16
    the government is really involved in
  • 00:32:17
    about 12 one fth of the economy in
  • 00:32:20
    states that are less welldeveloped you
  • 00:32:23
    find the government is really the
  • 00:32:24
    dominant buyer the dominant actor in the
  • 00:32:26
    economy and we've seen the problems with
  • 00:32:28
    planned economies and those economies
  • 00:32:30
    that don't have economic freedom their
  • 00:32:32
    productivity is really suppressed in the
  • 00:32:35
    US we do everything we can hopefully to
  • 00:32:38
    promote productivity by promoting
  • 00:32:40
    economic freedom and liberty in the
  • 00:32:42
    United States we are becoming a
  • 00:32:43
    wealthier society not because we're
  • 00:32:45
    mining more uh from M shafts uh not
  • 00:32:50
    because we're smelting more not because
  • 00:32:51
    we're Vulcanizing more we're becoming
  • 00:32:54
    wealthier because of our brains because
  • 00:32:56
    of the soft software algorithms because
  • 00:32:59
    of the formula that pharmaceutical
  • 00:33:01
    scientists come up with because of the
  • 00:33:03
    software because of the entertainment
  • 00:33:04
    products that George Lucas and Steven
  • 00:33:06
    Spielberg create uh so it's the
  • 00:33:08
    creativity the patents the research and
  • 00:33:11
    development that create the ability to
  • 00:33:14
    become wealthier other countries may be
  • 00:33:16
    just as smart maybe have more Geniuses
  • 00:33:19
    the genius though of the US economy and
  • 00:33:22
    of democratic capitalist economies is
  • 00:33:25
    that they take brain power and they
  • 00:33:27
    figure out how to channel it into a free
  • 00:33:30
    market and consumers in the end benefit
  • 00:33:32
    from
  • 00:33:37
    this prices rise when the government
  • 00:33:40
    prints too much
  • 00:33:42
    money the 1970s were a period of steeply
  • 00:33:46
    rising prices or
  • 00:33:49
    inflation at the worst in the late 1970s
  • 00:33:52
    inflation was running at 10% that means
  • 00:33:54
    the average price in the economy typical
  • 00:33:55
    price was Rising about 10% per year the
  • 00:33:59
    1970s inflation started with some shocks
  • 00:34:02
    driven by OPEC the or organization of
  • 00:34:04
    petrolum exporting countries oil prices
  • 00:34:06
    Skyrocket and that start inflation in
  • 00:34:08
    the United States economists Define
  • 00:34:10
    inflation as a rise in the overall level
  • 00:34:13
    of prices inflation is anytime the
  • 00:34:18
    supply of money has increased by say the
  • 00:34:21
    government printing more money so that
  • 00:34:24
    we have more dollars chasing the same
  • 00:34:26
    number of goods and the price of goods
  • 00:34:29
    Rises simply to reflect the increase in
  • 00:34:32
    the amount of money that is available
  • 00:34:34
    that's classic inflation the Federal
  • 00:34:37
    Reserve board in the United States
  • 00:34:39
    determines how much money is in
  • 00:34:41
    circulation it's very tempting to print
  • 00:34:44
    lots of money if you print lots of money
  • 00:34:46
    people temporarily feel wealthier
  • 00:34:49
    politicians generally urge the Federal
  • 00:34:52
    Reserve board historically have urged
  • 00:34:53
    the Federal Reserve board to be easy
  • 00:34:55
    with money to print lot of it why not uh
  • 00:34:58
    it doesn't cost anything to run the
  • 00:35:00
    printing press other than a little bit
  • 00:35:01
    of electricity and a little bit of paper
  • 00:35:03
    and yet it makes people feel good when
  • 00:35:05
    the bills are floating around the
  • 00:35:07
    country in the long run actually in the
  • 00:35:09
    medium term within months if the Federal
  • 00:35:12
    Reserve board is not responsible if it's
  • 00:35:14
    printing too much money then that begins
  • 00:35:17
    pushing prices up in the economy as
  • 00:35:21
    money becomes more available its value
  • 00:35:23
    shrinks and prices rise once inflation
  • 00:35:27
    starts spiraling upwards it's hard to
  • 00:35:29
    get it under control in the 1990s we
  • 00:35:32
    haven't had very much
  • 00:35:34
    inflation and the main reason is that
  • 00:35:37
    we've had a lot of stability in the
  • 00:35:41
    money supply of the United States the
  • 00:35:44
    government hasn't been printing a lot of
  • 00:35:47
    extra money and goods and services have
  • 00:35:50
    been growing at about the same rate as
  • 00:35:53
    the amount of money that's available in
  • 00:35:55
    the economy and if they grow at about
  • 00:35:56
    about the same rate then we don't end up
  • 00:35:58
    with very much inflation because we
  • 00:36:00
    never have this situation where we have
  • 00:36:02
    too much money chasing too few goods the
  • 00:36:06
    slow inflation of the 9s is a result of
  • 00:36:09
    vigilant anti-inflationary policies at
  • 00:36:12
    the Federal Reserve it has slowed down
  • 00:36:14
    the printing presses and maintained slow
  • 00:36:17
    stable growth in the quantity of money
  • 00:36:20
    circulating in the
  • 00:36:25
    economy so Society faces a short-run
  • 00:36:28
    tradeoff between inflation and
  • 00:36:31
    unemployment the Federal Reserve
  • 00:36:33
    chairman is considered by many to be the
  • 00:36:36
    second most powerful person in
  • 00:36:37
    Washington next to the president but a
  • 00:36:40
    Fed chairman like Alan Greenspan has a
  • 00:36:43
    most difficult job he's supposed to keep
  • 00:36:46
    inflation under control and also ensure
  • 00:36:49
    that unemployment stays low you can't
  • 00:36:52
    achieve both those goals he holds only
  • 00:36:53
    one policy instrument the money supply
  • 00:36:57
    if he prints a lot of money that's going
  • 00:36:58
    to stimulate the economy and reduce
  • 00:37:00
    unemployment but it's also going to lead
  • 00:37:01
    to inflation in the long run by contrast
  • 00:37:04
    if he contracts the money supply that's
  • 00:37:06
    going to tend to raise unemployment mean
  • 00:37:08
    lower inflation in the long run so while
  • 00:37:10
    he'd like both unemployment inflation to
  • 00:37:12
    be low all the time since he only has
  • 00:37:14
    one policy instrument he can't always
  • 00:37:15
    achieve that the short-run tradeoff
  • 00:37:18
    between inflation and unemployment
  • 00:37:21
    economists call the Phillips curve after
  • 00:37:24
    the man who first studied this
  • 00:37:25
    relationship the Philips curve is a
  • 00:37:29
    relationship between inflation and
  • 00:37:31
    unemployment that says that when
  • 00:37:33
    inflation is high unemployment is low
  • 00:37:35
    and when inflation is low unemployment
  • 00:37:37
    is high what it basically means that if
  • 00:37:39
    when monetary and fiscal policy makers
  • 00:37:41
    expand the economy by increasing
  • 00:37:43
    government purchases cutting taxes or
  • 00:37:45
    printing money that's going to tend to
  • 00:37:47
    drive inflation up and unemployment down
  • 00:37:50
    conversely if they tend to contract the
  • 00:37:51
    economy by printing less money or
  • 00:37:53
    Contracting the money supply by raising
  • 00:37:56
    taxes or cutting government spending
  • 00:37:58
    that's going tend going to tend to raise
  • 00:38:00
    unemployment and lower inflation today
  • 00:38:03
    the Phillips curve is a controversial
  • 00:38:05
    topic among economists some believe that
  • 00:38:09
    the trade-off between inflation and
  • 00:38:10
    unemployment no longer exists they point
  • 00:38:14
    to the past several years when inflation
  • 00:38:16
    and unemployment declined in tandem the
  • 00:38:20
    Philips curve was really a simple model
  • 00:38:23
    that plotted on one graph the
  • 00:38:25
    unemployment rate and the inflation rate
  • 00:38:28
    and it showed during the 1960s and part
  • 00:38:30
    of the 1970s that there seemed to be a
  • 00:38:33
    kind of tradeoff that if you wanted to
  • 00:38:35
    battle unemployment you could give up
  • 00:38:37
    the fight against inflation and vice
  • 00:38:39
    versa uh we've learned over the last 20
  • 00:38:41
    years that trade-off is not really there
  • 00:38:44
    uh the markets have become much more
  • 00:38:45
    efficient much more rational I would
  • 00:38:47
    predict that the Philips Curve will
  • 00:38:49
    again look like it is operative uh if it
  • 00:38:53
    doesn't within the next 10 years I would
  • 00:38:55
    be extremely surprised Ur rised I think
  • 00:38:57
    that this is a relatively unique period
  • 00:39:01
    in our economic history as opposed to a
  • 00:39:03
    new regime that is going to persist
  • 00:39:05
    forever there are always periods in
  • 00:39:08
    economic history when the Phillips curve
  • 00:39:09
    has not looked like it is applying for
  • 00:39:13
    at least some period of time but it
  • 00:39:15
    tends to come back uh again and again as
  • 00:39:18
    a as a historical or an empirical
  • 00:39:21
    relationship that we observe economists
  • 00:39:24
    May disagree about its validity today
  • 00:39:27
    but the Phillips curve is crucial for
  • 00:39:30
    understanding many developments in the
  • 00:39:32
    economy policy makers in Washington can
  • 00:39:35
    influence the course of inflation and
  • 00:39:37
    employment by changing what government
  • 00:39:40
    spends in taxes or the amount of money
  • 00:39:42
    at prints because these actions are
  • 00:39:45
    potentially so powerful economic policym
  • 00:39:48
    is always a subject of fierce
  • 00:39:52
    debate so here they are the basic
  • 00:39:55
    concepts of of Economics they're the
  • 00:39:58
    intellectual backbone of what you will
  • 00:40:00
    be studying in economics they offer
  • 00:40:03
    insights into how economists think about
  • 00:40:06
    people and their decision making about
  • 00:40:08
    markets and entire economies you'll see
  • 00:40:12
    that a few fundamental ideas can be
  • 00:40:15
    applied to many different
  • 00:40:25
    situations
Tag
  • escaseza
  • economía
  • decisións
  • trade-offs
  • custo de oportunidade
  • incentivos
  • produtividade
  • goberno
  • mercados
  • equidade