Economist examples

Question 1

J.M. Keynes

Answer 1

PRO GOV

• How to get out of the ‘Great Depression
• There was minimal government intervention in the US
  economy – g/s were provided by firms but there was no profit incentive or finance available to invest / innovate
• He said not enough ‘demand’ in the economy, due to a lack of income/employment so the government needed to spend in order to create jobs and income

Question 2

Paul Krugman

Answer 2

PRO GOV

• Known for reviving
  Keynesian approaches to government spending, after the Global
  Financial Crisis of 2007/8
• In 2012, he launched a ‘Manifesto for Common Sense’, he called for an increase in government spending in to stimulate greater employment and economic growth
• A key issue was the private sector’s relentless pursuit of profit. This drive led firms and banks to take excessive risks, creating instability in the financial system.

Question 3

Mariana Mazzucato

Answer 3

Key Idea: Government’s role should extend beyond fixing market failures to actively creating and supporting new markets.

Innovation:
Driven by collective effort and strong education systems.
Requires public funding and a supportive ecosystem.

Government’s Role:
Invest in innovation and share in the profits.
Help firms manage risks associated with innovation.

Question 4

Milton Friedman

Answer 4

Key Ideas: Advocated for managing economies through monetary policy (interest rates, exchange rates, money supply) instead of fiscal policy.

Policies Supported:
Privatization over nationalization.
Deregulation of industries.
Market liberalization, including controversial areas like drug markets.

Question 5

Paul Collier

Answer 5

Governance and Policy:
Good governance and economic policies drive growth.
Poor governance and bad policies can destroy economies (e.g., Zimbabwe under Robert Mugabe).

Opportunities:
Good governance helps realize opportunities but cannot create them where none exist.
Persistence of Bad Governance:
Some leaders benefit from it, becoming part of the global superrich.

Turnaround Factors (Empirical Findings):
Population size.
Percentage of population with secondary education.
Recent emergence from civil war.

Question 6

Dambisa Moyo

Answer 6

Governments will always “opt for short-term quick
fixes that have the tendency to undermine long-term
growth”

She suggests that:
* Political campaign contributions should be limited
* Those running for office should have a minimum level
of qualifications
* Electoral cycles should be extended
Dambisa Moyo

Question 7

Daron Acemoglu

Answer 7

Key Findings:
Transitioning from nondemocracy to democracy increases GDP per capita by about 20% over 25 years.
Democracy fosters growth regardless of a country’s initial economic development, but its effect is stronger in countries with higher secondary education levels.

Study Details:
Examined 184 countries from 1960–2010.
Identified 122 democratizations and 71 reversions to nondemocratic regimes.

Question 8

Kate Raworth

Answer 8

The Doughnut Model:

Social Foundation: Ensures everyone has access to life’s essentials (e.g., food, water, healthcare, education).
Ecological Ceiling: Prevents humanity from overshooting planetary boundaries (e.g., climate change, biodiversity loss).
Safe and Just Space: The area between the social foundation and ecological ceiling where humanity can thrive sustainably.

Add more about aim is not simply to increase GDP

Question 9

Dieter Helm

Answer 9

Natural Capital:

Natural capital (renewable and non-renewable resources) underpins human survival and well-being.
Environmental protection and economic growth can coexist.
Proposes a framework to measure the value of natural capital and implement the “polluter pays” principle.
Legacy:

Over-reliance on GDP growth has caused severe environmental harm.
Advocates acting now to prevent irreversible damage to our economic and ecological systems.
Suggests rethinking the economy to live within environmental limits, using alternative measures to GDP.