All Terrain Thinking

A Compendium of things I think are Important

Economics: It's not just whats' in your wallet

Introduction to Macroeconomics 

Welcome to an Introduction to Macroeconomic Principles. At the core of any economics course is the problem of scarcity: there is simply not enough "stuff" to go around so choices need to be made continuously and economists study these choices.  Scarcity certainly imposes many choices on students in situations similar to yours: do I major in Marketing or English? do I take a computer course? do I work on an assignment or head to a party?  Experience has shown that some students approach these choices head on while others avoid them, but no one escapes them.  The same is true of the choices we will make concerning the balancing of our professional and personal lives and the balancing of consumption for today against investment for tomorrow.  Do I go to that movie or work on that research paper?   Do I work Saturday on the new project at work or go to the kid's concert or ball game?  Do I buy that new "hot car" or do I put that money into a mutual fund to pay for the down payment on a house?

Despite all of the PR executives who tell us that "You can have it all," in most cases you cannot have it all and you will need to make these choices.  It should not take long to figure out that there will be no shortage of "experts" telling you how to make those choices. 

Scarcity has also imposed on all societies the need to allocate resources, to design 'economic systems' which will solve the basic economic questions of What to produce, How to produce it, and to Whom does it get distributed? It does not matter whether we are talking about the ancient Chinese or Egyptian societies, Renaissance Europe, Colonial America, or modern Latin America.   In each society there was not enough to satisfy all wants so choices needed to be made.  Do we spend the money on missiles or health care, do we spend it on new highways or mass transit, education or recreation?  How do we allocate scarce parking spaces at University?

The focus in this course will be on how well the system in this country performs its job of allocating resources.  Some of the policy questions that we will address are: What will the prospect for jobs be upon your graduation? Should the FED raise interest rates? What is inflation? What is the FED and should the FED steer us to zero inflation? What is the federal budget and should we pass a balanced budget amendment? Should we expand trade agreements such as GATT and NAFTA? What is the future of high wages in the industrialized countries of the world? Is immigration a good or bad thing for the economy and should we restrict it?

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