PAPM 1000 Winter 2011 1
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PAPM 1000 Winter 2011 1 Carleton University Arthur Kroeger College of Public Affairs PAPM 1000: Introduction to Public Affairs and Policy Management Winter Term: History of Economic Thought Winter 2011 Instructor: Derek Ireland Wednesday: 14:35-16:25 (2:35-4:25 PM) Office: D199 Loeb Building C164 Loeb Building Phone: 613 747 9593 Office Hours: Wednesdays From 13:00 to 14:20 --Or Email: djirel@sympatico.ca Determined Through Emails with Student Course Objective The objective of the course is to provide an understanding of economic ideas and thinking, how these ideas have evolved and developed and been applied through many centuries, and the implications of economic ideas for past and current policy debates, analysis, development and management. What do we mean by economic ideas? Economic ideas are essentially the concepts, hypotheses, presumptions, guesses and initial thoughts on cause and effect relationships that have been identified, discussed and argued about by economic thinkers over the past decades and centuries. Some of these concepts, guesses and so on are then developed into economic theories which are applied and tested in theoretical and empirical research and policy analysis in our attempts to find answers to such questions as: . Why do consumers purchase what they do? . Why do businesses produce what they do and locate in one place rather than another? . Why do countries trade with each other and should there be more or less international trade in the future? . Why do some countries grow faster than others? . Why are the more advanced OECD countries expected by many economists to grow much more slowly in the future? . Why is unemployment so much higher today than previously? . In the future, should we be more worried about unemployment or inflation? . Why is pollution so hard to control? . Why do governments regulate some industries and markets more than others? . And should government involvement in the economy increase or decrease in the future? . What are the relationships between gross domestic product per capita (GDP/capita), social well being and “happiness”? And what do these concepts and relationships mean for policy analysis, development and management in the future? Economic thinkers have been wrestling with and testing these and other economic ideas and their implications for over 2000 years. Therefore, in this course, we will emphasize PAPM 1000 Winter 2011 2 why ideas develop and evolve through time. The economic ideas of one period influence the ideas of later periods and how the ideas are applied in later periods. Some earlier ideas are adopted, adapted, and improved while other ideas are rejected outright – and in a few cases some of the rejected ideas make a comeback decades or a century later. In order to highlight this evolutionary process, the text book and course present these economic ideas in chronological order. For the purposes of this course, the word economic has two meanings. The first refers to an approach to studying human behaviour. This approach conceives of and represents human behaviour as a matter of choice that is purposeful but constrained (by e.g. limited income, time, effort, interest, information and cognitive capacity). The second meaning refers to a subject (or economic agent), through focusing on the situations, conditions and actions that affect the material well-being of individual consumers, households, companies, and other groups, including society in total. The course uses both meanings of the word economic, either one at a time or in combination. The terms economic thinking and economic thought suggests the efforts that all of us make to understand the world around by means of both theory and experience. Theory involves developing conclusions about the world with reference to an interpretive framework or model. Experience involves developing conclusions about the world with reference to direct observation and measurement. We will discuss how economic thinkers vary greatly and argue constantly regarding the importance to be placed on theory and experience in their efforts to comprehend the world. Moreover, earlier economic ideas and theories are often changed or dropped completely because later economic thinkers conclude that an earlier theory did not correspond with reality (or at least their perceptions of reality). This will be a recurring theme throughout this course. An understanding of the development of economic thinking is important to persons working in or with the public sector, and therefore is highly relevant to persons in the B.PAPM program. As noted above, when policy makers and analysts define contemporary policy problems and evaluate and compare alternative government actions to address those problems, many of them use economic ideas that often have a long history which can go back many decades and even centuries. For example, when policy makers explore options to reduce unemployment, they will use and contrast the ideas of Adam Smith, Keynes, Friedman, Marx or other economic thinkers who we will discuss during this term. Better understanding the origins of these ideas, the historical context that influenced why and how they emerged, and the ideas’ earlier evolution and applications allow policy makers and analysts to better appreciate the insights, strengths and weaknesses of these ideas. PAPM 1000 Winter 2011 3 Economic ideas become particularly important when they are used to assess policy problems and to provide the rationale for laws, regulations, policies, programs and other government actions. The resulting changes to e.g. tax, expenditure, interest rate, procurement, industrial, trade, employment or other policies affect the material well- being of the Canadian economy and society as well as of individuals, companies and other groups either directly by making them richer or poorer, or indirectly through changing their behaviour. Finally, the economic ideas of the past and present and the economic theories that are developed from these economic ideas are used by policy makers and analysts to evaluate and compare alternative government actions by drawing upon both theory and experience. This is done for example by: considering the appropriateness of their assumptions; the logic of their reasoning; or the ability of the theory to correspond with actual experience and the available evidence and to predict future outcomes. During the course, special emphasis will be placed on the relevance of these many economic ideas for a post-global recession world dominated by slower economic growth, uncertain job prospects, growing inequality, and debates on the relative importance of government failure versus market failure especially in the OECD economies. Academic Accommodation Students with disabilities that require academic accommodation are to contact the Paul Menton Center in order to complete the necessary letters. Having done so, these students should contact the course instructor at least two weeks prior to the mid-term test in order to discuss their needs. Course Requirements The Winter Term will determine 50% of the PAPM 1000 course grade for the full year. As described below, credit for the Winter Term will be based on tutorial contributions, four writing assignments, the Mid-Term Test, and the Final Examination. Four writing assignments will be given in weeks 3, 5, 9 and 11 (to be handed in during weeks 4, 6, 10 and 12) as described below in the Course Outline, and each assignment will have a length of no more than 750 words – which is about one and a half to two typed pages single spaced. The Mid-Term Test will be written before Winter Break during the class of Week 7 on Wednesday February 16; and the Final Examination will be scheduled during the period of April 7-21. The Winter Term grade will be calculated using the following weights: 15%: Tutorial Contributions consisting of: 6% Attendance – This is calculated based on 0.5% per tutorial plus a bonus of 0.5% for attending all 11 tutorials, for a total maximum mark for attendance of 6% PAPM 1000 Winter 2011 4 5% Participation – This is based on the regularity and quality of the weekly contributions to the discussions 4% Leadership – This is based on the demonstrated ability to guide the discussion. Starting from the first tutorial, each student will be required to provide one short presentation on the reading(s) for a particular week. The purpose of each presentation is to frame and inspire group discussion, not replace it. Accordingly, presentations should be under 10 minutes. Presenters should not waste time simply summarizing the readings or paraphrasing the Lecture Notes (see below). Instead, presenters could (among other things) identify and state: the central arguments of the reading(s), develop the connections between them and the lectures or earlier readings, identify elements with which they agree or disagree, outline the reasons for their agreement or disagreement, indicate their views of the readings’ importance to past and current policy development, and pose questions in order to direct the discussion and debate during the tutorial. Please attend and participate in your tutorials. Otherwise PAPM 1000 students are simply throwing away marks. And from what I am told and have seen for myself, the tutorials can be a lot of fun. 20% Four Writing Assignments – Each assignment will have a maximum mark of 5, and failure to hand in a writing assignment will result in a mark of zero (see below). 21% Mid-Term Test 44% Final Examination When marking the writing assignments and the mid-term and final exams, the three TAs and I will be assessing the student’s understanding of the economic ideas and thinking of past scholars and of the differences between these ideas and scholars, and as well looking for your views on the importance of these economic ideas and thinking and their contributions to current economic thought and debates and to government policies and other actions and our prosperity and quality of life.