Sat 13th Jul
Economics in Action: Micro and Macro Effects
So, what is economics? How can the study of economics help to inform and to improve the decisions made throughout business and government? An easy textbook definition would be that economics is “the study of resource allocation.” However, in reality, our perspective is much broader. Economists are interested in human behaviour, and in particular the decisions that people make when the outcome for them also depends on the decisions of others. Hence, in effect, we study “interactive decision making.” Sometimes different decisions are linked by the prices of a market system (this is microeconomics), or the strategic considerations of those involved (this is game theory), or sometimes we take a “big picture” perspective on the aggregate properties of economies (this is macroeconomics). In the first day, we explore what economics is about and how it can be applied in real-world scenarios. The first lecture offers an introduction to the world economy as a whole and in its components. It describes core facts of the world macro environment in terms of economic growth, inequality and global imbalances. The second lecture explains what under- pins economists’ faith in markets as a way of efficiently allocating resources. In this lecture an experimental game is used to explore how markets might be balanced, and what market outcomes we might expect. This first day provides a crucially important opportunity for course delegates to absorb themselves into the style of analysis that will be used throughout the course.
Academic Briefing (Rui Esteves)
Around the World in Sixty Minutes (Rui Esteves)
Understanding How Markets Work (Michalis Rousakis)