by From Asad Zaman During the last two semesters, I taught Macroeconomics based on a new approach which re-incorporates the history that Economists forgot (See Method or Madness?). The central idea of the course is that economic theories cannot be understood outside of their historical context. Conversely, economic history cannot be understood except by studying the economic theories (right or wrong) which were used by contemporaries to shape policy responses to historical events. The website for the entire course is “Macroeconomics“. In particular, Lecture 18B explains the principle of “Entanglement“. Below I provide Final Exam questions and answers, to give the flavor of the course. This post is about the first 4 out of 12 questions. Q1: Stiglitz: “Ricardian equivalence is taught in
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from Asad Zaman
During the last two semesters, I taught Macroeconomics based on a new approach which re-incorporates the history that Economists forgot (See Method or Madness?). The central idea of the course is that economic theories cannot be understood outside of their historical context. Conversely, economic history cannot be understood except by studying the economic theories (right or wrong) which were used by contemporaries to shape policy responses to historical events. The website for the entire course is “Macroeconomics“. In particular, Lecture 18B explains the principle of “Entanglement“. Below I provide Final Exam questions and answers, to give the flavor of the course. This post is about the first 4 out of 12 questions.
Q1: Stiglitz: “Ricardian equivalence is taught in every graduate school in the country. It is also sheer nonsense.” Explain the theory, and arguments for it. Then explain why it is sheer nonsense. read more