PSCI231 Lecture Notes - Lecture 1: Fiscal Policy, Externality, Market Liquidity
24 Feb 2015
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Public interest approach: government should seek to promote the public interest. Difficult to say exactly what the public interest is. Normative analysis starts with assertion that government policy should seek to promote public interest. Any rationale for normative policy must be based on one of these 4 goals. The use of resources so as to maximize the production of goods and services. Make per capita from consumption as high as possible. Smooth business cycle, keep unemployment and inflation rates low and stable, promote economic growth. Pursuit of economic efficiency seeks to make the overall size of the economic pie as large as possible. Other social objective (e. g. to promote national unity or national culture)- Objectives that are unrelated to the other three above. Focus of individuals/groups who make policy decisions: objectives, behaviors, interaction. Air canada, the airline industry, and public policy. Privatized, then was deregulated so other companies could compete.
