Daily Warm-Up

The lyrics of “I Want It All” remind us that there is a lot to do in one short lifetime. Freddie Mercury, Queen’s lead singer, asserts that he wants it all and he wants it now. Do you prefer to consume goods in the present or future? With reference to these lyrics, explain why individuals charge interest for deferring consumption.

What are we doing today?Collecting journalsPresenting Songs (?)Unit 1, Chapter 2 lectureForming groups for major project 1

Research/Brain-stormingOutline #1 due

Post Test StatsAvg. Grade:Avg. # of Students who did HW/Class:Avg. current grade of all classes:# of blog page-views: 1,614 # of blog posts: 111

Unit 1, Chapter 2Comparing Economic Systems

Schools of Economic ThoughtEconomists are influenced by personal

opinions, beliefs, and the institutions and governments under which they live.

This leads to different economic theories.Different schools of thought can have an

impact on laws and government policies.Judgments about economic policies depend

on a person’s values.Values and beliefs are characteristics that a

person or group considers important.The science of economics is not used

to judge whether a certain policy is good or bad.

The Three Basic Questions

1) What goods and services should be produced?

2) How should they be produced?

3) Who will get the goods and how will they be distributed?

Types of Economic Systems

Traditional EconomyCommand EconomyMarket EconomyMixed Economy

“Hands On” vs. “Hands Off”“Hands Off”Market, Traditional

“Hands On”Command, Traditional

CompromiseMixed

Traditional Economy

Examples

Command Economy

Examples

Schools of ThoughtCommunismSocialismFeudalismMercantilismCorporatism/Fascism

Market Economy

Examples

Schools of ThoughtCapitalismGift economyMutualismCorporatism/FascismAnarchismMutualismNon-Property SystemSocialist Market Economy

Econophysics One driving force behind econophysics

arising … was the availability of huge amounts of financial data, starting in the 1980s. It became apparent that traditional methods of analysis were insufficient - standard economic methods dealt with homogeneous agents and equilibrium, while many of the more interesting phenomena in financial markets fundamentally depended on heterogeneous agents in far-from-equilibrium situations.

Econophysics – Economic System (Price)

Price of a commodity for every one of the 50x50 free-trading agents. Each agent has 8 neighbors. Note the spontaneous formation of a quasiparticle

Econophysics – Money OwnedMoney owned by

every agent in a 200x200 agent free market simulation.Central part of the screen is composed of agents with different poverty threshold. Periodic boundary conditions.

Econophysics – Price 2 Price of a dynamically

traded commodity for each one of the 200x200 agents in a free market economy. 4 Neighbors per agent. There are two 10x10 agent areas where agents have different poverty threshold than the rest. Due to the initial conditions, this generates two price waves.

Econophysics - ResourcesResources

accumulated by each of the 200x200 agents in a free-market economy simulation. Phase transition is observed at iteration 1000 when the effective temperature is changed.

Mixed Economy

Schools of ThoughtDistributismGeorgismMercantilismPlanned MarketAmerican/Nordic/Japanese/French

Tony Benn

Which economic system is Tony Benn arguing for?

Group Project #1Anonymous peer evaluations

3 drafts/outlinesGroup presentationGroup wiki postIndividual research paper

Group Presentation4 groups: command, traditional, free

market, and mixed economy.One question for each of the other groups.How does it answer the 3 questions?Describe 3 schools of thought in detail.Brief biography of two notable

thinkers/writers/economists: Adam Smith, Karl Marx, etc.

Describe any notable books/writings and why they are important. 3 quotes.

Current/Historical examples of this system. Successes, failures, etc.