Article Review 4

In this article, the author talks about the problems that emerging economies face at the moment, with the idea that they all have common symptoms and may be dealing with a hidden debt that is unknown to that country. China is, again, one of the main parties involved that is a huge factor when taking into account the situations of the emerging economies of many countries. Due to the way the hidden debt works, it will usually go undetected and cause extreme chaos in a way, or just be a small obstacle that doesn't affect the country too much. The crisis in Greece is a good example, in which their crisis only became apparant in 2010 because of the fact that their accounting ways caused people to think their debt was lower than it actually was. The problem with most emerging economies now, though, is the fact that many borrowed money from China in terms of U.S. dollars, along with the fact that their development banks aren't included in data, so it's hard to figure out just how much China influenced/impacted certain countries compared to others. And because of this, the article mentions that data should be handled carefully to determine the extent of China's influence in terms of loans, as their slowed down economic prowess can affect a variety of countries.

Chapter 11

The focus of the chapter was based mainly on the different types of goods that are part of a market, and how they affect policy makers' decisions, with the main focus on public goods and common resources as the chapter's title states. Many problems arise with common goods, as no actual revenue is made from them, but instead have benefits that cause people to decide on whether the benefit would be worth the cost of producing it. Because they are public, the problem of free-riders also comes up when dealing with something like a fireworks show, where some people can just not pay to see it. Then there's the gray area between public and private goods for some like lighthouses, where it was a private good early on but turned into a public good. Cost-benefit analysis is important, as rough estimations have to be made of the benefit when compared to the cost of it to see whether it's a good decision or not to produce or have. Common resources face a different type of problem, with private decision makers constantly overusing what is available, making it worse for other people that want to use it. With this in mind, government intervention aims to regulate it efficiently, so that no problems come about from the overuse of it, although sometimes it is very hard to enforce when you consider something like the ocean and how vast it is, with many people mostly looking out for themselves might not think twice about the negative effects they create.

Chapter 10

Chapter 10's focus was on GDP and how it's affected by many different things happening throughout the country of which it is being measured. It is a very big process that involves a large scale of every good and service (that is in the legal market) being sold and produced. It measures the net value of total spending and revenue the country produces, in which, ideally, the numbers would be the same, with number discrepencies being due to how it's calculated in two different ways, either from the spending or selling point of view. It is an intricate system that takes into account many things but sometimes excludes stuff to get the correct value of actual GDP, along with taking into account seasonal changes. For example, the used car market would not be taken into account for the car maker, as it has already been put out in the market and sold as is. The variety of households in a country and what they buy, how much they make, whether they have a company outsourced in a different country, all affdct GDP in different ways (or no way at all as outsourced companies raise GDP of the country they're located in instead of the country the person is in/from). Spending on imports/exports is also a way that GDP is affected.

Article Review 3

Stockman has written another article, with another prediction of the economy crashing after a certain point, with keynesian economists affecting the outcome of it greatly with the policies they helped to produce and enforce for the federal government. The main person talked about, Bernanke, is ridiculed throughout for his reasoning and the ideas that he helped implement, as the policies created a lot of change in the government's economy that cause it to be in it's little bubble that will eventually pop harshly. With reaching very low unemployment being the reasoning for his decisions, and taking credit for it by saying that under his policies it happened, Stockman argues that Bernanke really didn't do anything overall except cause excessive spending that's not needed, as shown by the amount spending has increased and the rate unemployment went down. With the amount of spending, unemployment should technically be nonexistant, but it only altered it by just a little bit that Stockman constantly argues against of it not adding up. Having increased spending by so much, along with having a 0 interest rate policy, the U.S. is in a bad spot, as such a low interest rate won't cause any revenue to actually be made. Bernanke's thinking of European governments also seems silly, as Stockman compared both the U.S.'s and Germany's GDP growth rate, in which both have different types of economies and policies, and showed Germany's was slightly higher, even after the U.S's massively increased spending to try to help out the economy.

Chapter 8

Chapter 8 focused on how taxes affect the market that they're imposed in by showing how revenue is made from them, along with the costs of that revenue that gets taken away from total surplus between consumers and producers. The loss in surplus, called deadweight loss, can be either big or small, depending on the elasticity of both supply and demand curves. But for most goods in a market, a tax will always result in deadweight loss based on how the market responds to it. Inelastic supply and demand curves cause the deadweight loss to be much less than if they were elastic. But the implementation of taxes can also cause other negative effects, based on opportunity cost, willingness to pay, and how large the tax is. With unfavorable conditions, a trade that might happen based on the situation before the tax won't if it isn't favorable to both parties involved. The tax would then cause not only a loss in surplus, but on the whole trade if it's too big, meaning no tax revenue is received and the market loses out because of it. As the tax increases, more deadweight loss is accrued, meaning it would be very inefficient for it to be implemented if it interferes too much with the market. Because of this. total tax revenue is increasing until it reaches a certain point, where the tax interferes too much that revenue would start going down as people don't want to take part in buying or selling the good or service being taxed.

Chapter 7

Chapter 7 had a lot of focus on both consumers and producers, introducing the new ideas of consumer surplus and producer surplus. With consumer surplus, people willing to buy a good at a certain price but are able to buy it for less causes a surplus for them, as they save on money that they were willing to spend. The lower the price and the higher they're willing to pay, the more surplus the consumer has. While consumer surplus is related to demand curves, producers are related to supply curves, and instead of maximum willingness to buy something, they instead use the lowest price to do a certain job based on how much they would get and are willing to get. For producers, a higher price means more surplus as they will get more money based on how much the job will pay them. This causes the two sides to clash in a way, to find the best possible place for both consumers and producers to be happy. The market, at it's best, will find a way to maximize total surplus for both sides, needing to find the most efficient allocation of resources to do so. And, in reality, it also has to have a focus on equity so that more people have a chance to get the good if they want to. With this in mind, the idea of centrally planned economies usually don't work because of the vast amounts of information to try to appeal to everyone, and should usually be left alone to find the equilibrium point.

Article Review 2

In this article, Stockman focuses on the issue of the global economy currently being in trouble based on current situations that have appeared in trading, mainly in Brazil. With the decrease in trading and various other things like shopping and job employment, Brazil is currently heading towards an economic slump that will greatly affect the world's economy. The way the U.S. is affected is the amount they export to brazil, decreasing by a lot due to the fact Brazil is reaching a recession. The other country talked about is China, in which their current situation has caused a great loss in terms of money. Stockman is, again, very aggressive in his writing, mocking wallstreet and how they portray China as a great hope for better change in the economy that will increase growth and revenue. His viewpoint comes from the idea that China's economy is spiraling out of control, and it's currently just trying to keep it in check or controlled to a minimum. With these two countries, Stockman believes that worse is yet to come due to the current trends with both countries, and how the global market will respond to them. And with China's increasing market output of things such as steel, deflation is rampant and compared to a freight train due to the amount of price reductions China has caused in the past three years. It's only a matter of time before more countries are either affected by these situations or they face similar situations, causing the global economy to be in trouble in the future.

Chapter 6

Chapter 6's focus on governement policies helped show how effective/ineffective they are, depending on the viewpoint. Two ideas taken into account, price ceilings and price floors, show how the market responds to such intrusive policies of the free market that would otherwise even out over time. With a price ceiling, it can either have no effect by being not binding, have a small/intended effect for the short run, or be disastrous due to being elastic as time goes on. The example given of there being only a certain amount of rooms being able to rent, while effective at first because of current inelasticity, it will cause huge shortages that affect consumers negatively by creating the need to bribe landlords to rent a room they shouldn't, causing it to slowly shift back to the equilibrium price in a way it shouldn't. Price floors can either have no effect, or cause surplus in the quantity of the good that cause sellers to not be able to sell everything they have. The other focus throughout the chapter is on taxes and how they affect consumers and market outcomes. If it's a tax on the good, demand curve shifts to the left due to the added price on it thats consumers would have to pay. But if the tax is levied onto the seller instead, the supply curve would shift that causes less quantity and a higher price, with the equilibrium point shifting based on how much the tax is.