Questions of the Week
(First Midterm, Weeks 1-5)
Week 1:
  1. What are the different characteristics by which we might classify economic systems? 
  2. According to Kennett, what are the major institutions of an economic system?
  3. According to Marx, what makes an economy capitalist? 
  4. According to Kornai, what makes an economy socialist?
  5. What are the different measures by which we might compare the performance of economic systems?
  6. What are the fundamental problems we find in the comparison of economic system performance?
  7. What is the Gershchenkron effect? What does it tell us about the comparison of economic performance? 
Week 2:
  1. What is the classical theory of economic change?  What is the source of growth, according to Ricardo and Malthus, and what is the ultimate outcome?
  2. How does the Neoclassical view of economic change differ from the classical view?
  3. What is the Marxist theory of economic change?  How does Marx's historical materialism rely on the Hegelian dialectic?  Why is this approach considered an hypothesis of revolutionary change?
  4. What are the chief characteristics of Feudalism?  Of Capitalism?  How did Feudalism differ from the economic systems of the ancient civilizations? 
  5. What conditions were necessary for the growth of Capitalism? 
  6. What are the major events which led to the emergence of Capitalism from Feudalism? 
  7. What was Mercantilism, and how did economists such as Smith, Hume, and Ricardo criticize it? 
  8. What is the theory of Surplus Value?  How does it relate to accumulation?  What does it explain and predict?  What role is played by the "Reserve Army of the Unemployed" and class struggle? 
  9. What are the chief criticisms of Marx's theory of Surplus Value? 
  10. What is Lenin's contribution to Marxian theory?  Consider especially how his theories of Monopoly Capitalism, Imperialism, and Uneven Development interact to modify Marxian theory. 
  11. How did the anarchists (e.g., Bakunin, Proudhon), the so-called "utopian" socialists (e.g., Rousseau, Morelly, Babeuf, Saint-Simon, Owen, Fourier), and the revisionists (Bernstein, Tugan-Baranovsky, and Kautsky) differ in their thinking from the traditional Marxist approach?

Week 3:
  1. What was Smith's Invisible Hand?   What does it suggest for a truly laissez-faire economy?
  2. What was Mill's argument about the separation of production and distribution?  What policies did he advocate?
  3. What is competitive general equilibrium?  How does Marshallian partial equilibrium differ from Walrasian general equilibrium?
  4. What is Pareto Optimality?  How does the Kaldor Compensation Criterion make Pareto Optimality a more useful concept?
  5. What are the three Arrow-Debreu fundamental theorems of welfare economics, and what do they imply?  What preconditions are required?
  6. What is the Theorem of the Second Best, and what does it imply for a market economy that fails to meet perfect market conditions?
  7. What is the Coase Theorem, and what does it imply for the efficiency of a free market economy?
  8. What criticisms did the Austrian school (esp. Hayek) make of the Arrow-Debreu approach to judging the efficiency of capitalism?  What important role do market prices play, beyond clearing markets?
  9. Why does Keynes' General Theory suggest for the appropriate role of government in a capitalist economy?  How does the view of the monetarists contrast with this?

Weeks 4-5:
  1. What is the Prisoner's Dilemma model, and what does it predict?  How does it compare to Smith's Invisible Hand?  When might the Prisoner's Dilemma work in society's interest, and when might it work against society's interest?
  2. What is the theory of public goods, and how does it compare to the Prisoner's Dilemma model?
  3. What is market failure?  Give examples.  What possible interventions could make a market economy perform better?
  4. What are the other important economic justifications for government intervention in a market economy? 
  5. What are the two major contrasting views of the state? What conditions allowed for the creation of the state?  How does Olson explain the changing objectives of the bandit chief, once he becomes stationary?
  6. Olson argues that market exchanges are commonplace even in societies without well-defined and enforceable property rights, but without these rights certain types of transactions necessary to economic development cannot occur.  Explain.
  7. What is public failure?  How might government intervention fail to make a market economy work better?  What are the major reasons for this?
  8. What is Arrow's General Impossibility Theorem?  What does it say about social choice and political coalitions? What are its implications for deriving an efficient, stable, fair, and preferred government economic policy?
  9. Why might political entrepreneurship in a democracy lead to unstable and even less-preferred policy choices?  What does Madisonian Liberalism imply for the long-term?
  10. What is Olson's theory of distributional coalitions?  How do they differ from encompassing coalitions?   Why are distributional coalitions more successful at organizing, and what are the implications of their success?
  11. In studying dynamic changes within capitalism, what did Schumpeter and the Austrians argue are the most important elements?
  12. What four conditions are necessary for evolution to occur?  What implications does the modern theory of economic evolution have on economic development and structural change, and how does it differ from the old view of evolution as gradual progress?
  13. How does economic evolution differ from mainstream economic thought in terms of whether we choose our economy, our institutions, our technologies, or our policies, or whether history chooses for us?  How does the notion that competitive selection creates evolutionary change contrast with its effect on incentive and learning?

Questions of the Week
(Second Midterm, Weeks 6-10)

Weeks 6-8:
  1. The United Kingdom is classified as a market capitalist economic system, yet many analysts have described it as a socialist economy.  What historical, structural, and organizational features of the UK make classification difficult?
  2. What are the major reasons discussed in class for the relative decline in the economic position of the United Kingdom?  Has this pattern changed significantly?
  3. What role has free trade played in the development of the United Kingdom?
  4. Any assessment of the British economic system had better look at nationalization and income policies and pay little if any attention to national economic planning. Discuss.
  5. Describe the important characteristics of France's economy after WWII.  How is it different from other major capitalist countries?
  6. Interest in the contemporary French economic system has frequently focused on its combination of market and plan mechanisms, yet critics have argued that, especially in recent years, the French in fact have done very little planning. Assess this controversy, indicating what contribution to the French economy (if any) is made by planning.
  7. Although many argue about the actual extent of planning in the French economy, some mechanisms of plan fulfillment (for example, public ownership in key industrial sectors, state control over investment, and so on) have been viewed as important. Discuss.
  8. What was the German Wirtschaftswunder (economic miracle), and why did it occur?
  9. Give a brief overview of Germany's economic history, beginning with treaty of Versailles.  What are the major events, institutions, and policies?
  10. What is the German Sozialmarktwirtshaft, or "Social Market Economy"?  What are its philosophical sources?  What are the primary components of government policy that define it?  How was it shaped by the major economic policies and events of Bismarck's Imperial Germany, the Weimar Republic, and Hitler's National Socialist Dictatorship?
  11. How did reunification affect Germany's economy, and how did it affect the rest of Europe.  Why?  Explain.
  12. Describe the chief components of Sweden's economy during the post-war period.  What is unique about its labor markets and government policies?  Why did those of the Stockholm School consider Sweden to be a "Middle Way"?
  13. To what extent and in what ways is the Swedish economic system and associated economic and social policies a potential model for planned socialist systems seeking a transition to market arrangements?
  14. Compare and contrast the economies of France, Germany, Sweden, and the United Kingdom.  In particular, consider the degree to which the product, labor, and capital markets fit the competitive model, and the performance of the economy in the postwar period.
  15. Compare and constrast the role of government in the economies of France, Germany, Sweden, the United Kingdom, and Japan.  Which ones have relied or currently rely on state planning, state ownership, redistributive policies, interventionist macroeconomic and labor market policies, or other forms of state intervention?  Finally, putting the role of government in a more global context, are these capitalist or socialist economies?
  16. Discuss the overall economic performance of the major capitalist countries, in the prewar period, the postwar period, and especially in the recent two decades.  To what extent does their performance give us evidence one way or another regarding the effects of relatively laissez faire policies?  What are the most significant difficulties in comparing the performance of these countries?  Give examples.
  17. The late Mancur Olson argued that the mature European economies are increasingly characterized by "Eurosclerosis".  Explain this argument, and consider Europe's long-term economic prospects.
  18. What is the European Union, how did it evolve, and how significant is it from the historical perspective?  What are its components, and what were its stages?  What roles did the countries we have discussed in lecture (the United States, the United Kingdom, Germany, France, and Sweden) play in its creation, development, and membership?  To what extent were their policies toward the EU related to their domestic political economy? 
Week 9-10:
  1. Economists often cite Japan as an example of a market capitalist system that has been able to meet or exceed the high growth rates historically experienced by the Soviet Union. Assess the nature and validity of this comparison.
  2. Give a brief overview of Japan's economic history, beginning with the Meiji Restoration.  What are the major events, institutions, and policies?  How did Japan transform its economy? 
  3. In what way was the relationship between government and business in Japan before the war similar to after the war?
  4. Contemporary Japanese economic performance has recently been attributed, in a major way, to the vital role of the state in the Japanese economy, especially the role of MITI. What is the nature of the state's role in the Japanese economic system, and what relevance if any, does this experience have for the contemporary United States?
  5. How did the Japanese keiretsu, or "main bank" system affect Japan's economic growth?  How did it help cause the bubble economy and then current banking crisis?
  6. A number of scholars have suggested the existence of an "East Asian Model" of economic development, as typified by Japan and the four dragons.  Is there such a model?  What similarities do these economies have, and what differences?  What role does the government play in each of these countries, and does this role differ significantly from the role of government in the other capitalist countries we have studied?  In what other ways might these economies have unique patterns?
  7. What development strategies were followed by the four tigers (Hong Kong, Singapore, Taiwan, and South Korea)?  In what ways were they similar, and how were they different? 
  8. What were the primary causes of the Asian Financial Crisis of 1997?  How did it affect each of the four tigers, and why?  How did it affect other Newly Industrializing Countries in the region, and why?
  9. It was argued in class that the Asian Financial Crisis of 1997 was really four different crises.  What were these, and which countries were most affected by each?

 

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