POLI 1P98 Lecture Notes - Lecture 8: Monetarism, 1973 Oil Crisis, John Maynard Keynes

• School: Brock University
• Department: Political Science
• Course: POLI 1P98
• Professor: Tim Heinmiller

Document Summary

I(cid:374)(cid:448)ol(cid:448)e (cid:858)(cid:271)ig(cid:859) ideas: accepted by most policy actors, change quite slowly. After enough failures on a dominant paradigm causes a crisis: a rival paradigm emerges- finding other solutions, alternative idea/ paradigm potential paradigm shift, advocates of a rival paradigm secure power (usually by winning an election. The quintessiatial paradigm shift: from keynesianism to neo-liberalism: economy policy managing economy stable growth, keynesianism paradigm managing the economy ((cid:1005)9(cid:1007)(cid:1004)(cid:859)s) started. Capitalism is inherently unstable and creates great inequalities. Governments can use their power to manage the economy, creating greater stability and equity. The (cid:858)(cid:449)elfare state(cid:859) ta(cid:454) the ri(cid:272)h a(cid:374)d gi(cid:448)e to the poor through progra(cid:373)s. (cid:858)cou(cid:374)ter-(cid:272)(cid:455)(cid:272)li(cid:272)al fi(cid:374)a(cid:374)(cid:272)i(cid:374)g(cid:859) ta(cid:454) duri(cid:374)g high (cid:271)oo(cid:373)i(cid:374)g when in recession spends the money it gets from taxing during the high boom. Reduces the up and downs in the economy: anomalies and policy failures: 1973 oil shock and the onset of (cid:858)stagflation(cid:859) middle east held back their oil. Defi(cid:272)it fi(cid:374)a(cid:374)(cid:272)i(cid:374)g: spe(cid:374)ds (cid:373)ore tha(cid:374) (cid:449)hat it (cid:271)ri(cid:374)gs i(cid:374) re(cid:448)e(cid:374)ue(cid:859)s** exam.