POLS 242 Lecture Notes - Lecture 4: Tied Aid, St Engineering, Block Drug
14 Apr 2016
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Document Summary
Neoliberal globalization and the crisis of the state. Neoliberalism: mix between neoclassical economic theory and neoclassical political thought. Society is nothing more than a group of individuals. Goal to decrease power of state and free up markets. Brought to 3rd world countries, not for political reasons, but to adjust to international requirements. First tried in chile, then brought to us and europe. Neoclassical economic theory: focus on price, outputs and income distribution through supply and demand. Believe that individuals are rational utility maximizes. Stable macroeconomic environment is defined by low inflation rate, secure property rights and a restrained government. Thus will attracted private investments to develop economic growth. Best method to effect macroeconomic stability is through monetary (budgetary) Greater government involvement leads to less growth greater trade leads to grater realization of comparative advantage. Argue that government policies are anticipated by economic agents. Reduce government spending and employment, deregulation, autonomy for central banks, tax based on consumptions.
