PSCI231 Lecture Notes - Lecture 5: Natural Monopoly, Economic Integration, Monetary Policy
22 Nov 2017
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Industrial policy (stimulate investment, exports, industries like auto, aerospace, defense, high tech): foreign policy and trade policy (military, exports, imports, foreign investment regulation), public ownership (nationalization of an existing private company, new public corporations) Public health is a positive externality we all benefit from others being healthy: public goods no rival, non- divisible, non- excludable ex. Street lamp, air: free rider problem individuals take advantage of a particular benefit without having the accompanying disadvantage protection by arm services or police, fire service. Information asymmetries/adverse selection difficult for the public at large to determine the quality of goods until after it is purchased. Non-economic: justice market can operate but society may not want that outcome, communitarianism sense that each member of society has a responsibility to enhance the good of that society ex. Equality, social solidarity: corrective justice, paternalism ex. Activities that may harm young people or the general population ex.
