The Available Economic Resource (continued)

经济资源与南北差别

从个人角度讲，贫富差别最重要原因是个人所拥有的 资源的差别。 从国家角度讲，人均所拥有的资源决定了该国的经济 发展水平。
• 发展中国家与发达国家 • 中国地大物博吗？


当人们拥有更多资源时，其经济活动的行为选择空间 就会更大，从而其经济活动的效益及生活品质就会更 好。 经济的发展过程实际上可以看成是经济资源不断累积 的过程。
Positive Definition:
• Economics is the science that studies how an economy operates or how economic variables are determined under the given economic environment (what happen?).
出勤+作业 30% 期末考试 70% 上课时间：1-17周 联系方式：chenx@ 答疑地点：经院高层207房间 答疑时间：待定

Macroeconomics
Lecture 1
Macroeconomics as a Science
What is Macroeconomics?

Economic System (continued)

How economic system can impact the individual behavior?

Objective (mainly the firm?) to pursue (profit, market share, political interest….)

What is Economics？

Normative Definition:
• Economics is the science that studies how to efficiently allocate economic resources (what should we do?). Nhomakorabea

Neoclassical and Keynesian, A Historical Review (continued)

Economics After 1980’s

New classicals
• Constructing the macroeconomics on the basis of neoclassical microeconomics
Macroeconomics
Xiaowei Chen
Room 207, Department of Risk Management and Insurance, Nakai University, Tianjin 300071, China Email：chenx@
课程介绍


Microeconomics is the study of how microeconomic variables (such the price and output of individual product) are determined; Macroeconomics is the study of how macroeconomic variables (such as GDP, employment, inflation among others) are determined.

Neoclassical and Keynesian, A Historical Review

Neoclassical economics:
Agent’s optimization Rational Expectation Market Clearing in Competitive Economy Traditionally, focused on microeconomic analysis
How are the macroeconomic variables determined? How can we explain unemployment and inflation? How can macroeconomic policy be used to resolve unemployment and inflation?

Course Objectives (continued)

The macroeconomics beyond the basic Keynesian model
Economic System (continued)

Question：
Is there an issue regarding suitability between these two respects of economic system? If yes, what kind of enterprise system may not be suitable to the market economy? Can you image other elements with regard to economic environment?

Neoclassical and Keynesian, A Historical Review (continued)

The breakdown of neoclassical synthesis
The emergence of stagflation; The ineffectiveness of Keynesian demand management policy in dealing with stagflation; The lack of micro-foundation; Insufficiency in explaining economic growth.

Neoclassical and Keynesian, A Historical Review (continued)

Keynesian economics ( generated from great deflation)
uncertainty Imperfect competition Sluggish price adjustment Disequilibrium and non-market clearing Traditionally focused on macroeconomic analysis
Individual Behavior

Economic variables are determined by the choice of individuals (firms, households and government), and therefore studying individual behavior is the starting point of economic analysis.
Economic System

Economic system can briefly be distinguished in terms of
the mechanism of resource allocation (planning mechanism and market mechanism). the system of enterprises (largely depends on ownership);
The Available Economic Resource

What is the economic resource？
Natural resource （自然地理和地产）； The resource created by economic activities（e.g. fixed assets); The resource which is untouchable (e.g. human capital, knowledge capital); Resources can be created but also can be destructed.

Rational
• All individuals behave optimally.

Adam Smith’s “invisible hand” dogma.
Economic Environment

Though individuals are selfish and rational, their choices are constrained by the economic environment they are staying.

Neoclassical and Keynesian, A Historical Review (continued)

Neoclassical synthesis
Dominating before 1980’s The synthesis of neoclassical microeconomics and Keynesian macroeconomics

New Keynesian
• Constructing the microfoundation of Keynesian macroeconomics
Course Objectives

Basic Keynesian model of macroeconomics, under which we shall understand
Individual Behavior (continued)