Economic Freedom 101

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Lecture handouts for the Jan 2020 version are available here.

Introduction

This short course provides provides a survey of global poverty and a discussion of the causes of prosperity. Particular emphasis is placed on the institutions required for market exchange, and the importance of economic calculation. As a satellite photo of the Korean peninsula makes clear, socialist planning is literally groping in the dark. We will look at the theoretical reasons behind this claim, and the empirical validation that economic freedom matters.

Prerequisites

The course does not rely on any previous study of economics.

Teaching methods

  • Lectures (3 sessions)

Textbook

The course is designed to tie into Chapters 4 and 12 of the following (amazing) textbook:

The website for the book contains an array of other resources: https://anthonyjevans.com/books/markets-for-managers/

An additional reading list is available here: https://anthonyjevans.com/course-readings/

An edited list of highly recommended articles from The Economist is here: https://anthonyjevans.com/the-economist-an-mba-reader/


Schedule

9am Session 1

Economics matters: The link between economic institutions and global prosperity

In this lecture I will ask some broad and fundamental questions about the application of economic theory to the real world, and the role of the economist as a force for making the world a better place. I will try to convince you that we have a fairly good understanding of what causes economic growth, and how important this is for raising living standards and improving people’s quality of life. In other words, economics matters.

10:45am Break

11:00am Session 2

Groping in the dark: Why socialist calculation is impossible

12:30pm Lunch

2:00pm Session 3

Economic transition in Central and Eastern Europe: Shock therapy or gradualism?

3:30pm Finish

If you’ve taken the course, you can check your learning with this quiz:


Can also include the Bag Game and the International Trade Game

Monetary Theory and Policy Workshop

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The purpose of this workshop is to understand basic models in contemporary Monetary Theory and Policy.

(Deep) background readings:

  • Patinkin, D. (1956) Money Interest and Prices Row, Peterson & Co
  • Friedman, M., and Schwartz, A., (1963) A Monetary History of the United States 1867-1960, Princeton
  • Woodford, M., (2003) Interest and Prices, Princeton

Textbook:

Problem sets:


Screen Shot 2015-12-30 at 09.36.17Readings on methods:

  • Origins of VAR – Friedman & Meiselman (1963); Lucas (1976); Sims (1980)
  • VAR – McCandles & Weber (1995); Bjornland (2000)
  • Narrative measures – Romer & Romer (1990)
  • Case studies – Sargant (1986)
  • Origins of DSGE – Kydland & Prescott (1982)
  • DSGE and Central Banks – Smets & Wouters (2002, 2007)
  • DSGE – Sbordone et al. (2010); Dotsey (2013); Romer (2011, Chapter 7)
  • After DSGE – Solow (2008); Blanchard (2016)

Two lectures on methods:

Other readings:


Courses:

Training programs:

Conferences:


Software links:

A Short Introduction to Macroeconomic Policy

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Introduction

This short course provides an overview of the ways in which governments try to influence the economy. It will provide an explanation of what monetary and fiscal policy are, and why they are used. We will assess the ECB’s response to the financial crisis and the 2009 Obama stimulus bill. Emphasis will be on providing a framework for participants to refine their own opinions.

Prerequisites

The course does not rely on any previous study of economics. However, a familiarity with economic terms (such as “inflation”, “GDP”, “balance sheet”), and an awareness of contemporary policy debates (such as zero lower bound monetary policy), will be useful. The course is aimed at people who watch Newsnight but don’t quite feel they understand the economic foundations of what’s being said.

Teaching methods

  • Lectures (2 sessions)
  • Case discussion (1 session)
  • Workshop (1 session)

Textbook

The only mandatory readings are provided in the schedule below. However the course is designed to tie into the following (amazing) textbook:

The website for the book contains an array of other resources: https://anthonyjevans.com/books/markets-for-managers/

An additional reading list is available here: https://anthonyjevans.com/2010/03/course-readings/

An edited list of highly recommended articles from The Economist is here: https://anthonyjevans.com/2011/05/the-economist-an-mba-reader/


Schedule 

9:00am  Breakfast

9:15am  Welcome address

9:30am Session 1: Monetary policy: A Beginner’s Guide to Central Banking*

Video: “An introduction to the Dynamic AD-AS model

11:15am Break

11:30am Session 2: The Euro in crisis

“The Euro in Crisis: Decision Time at the European Central Bank” Harvard Business School case no. 9-711-049 (£)

Questions: 

1. How does the ECB conduct monetary policy?

2. What actions were taken after the BNP Paribas freeze?

3. How do these actions compare to the Federal Reserve?

1:00pm Lunch

2:00pm Session 3: Fiscal policy: The Confidence Multiplier*

3:30pm Break

3:45pm Session 4: Workshop

Market for Managers Problem Set

Questions: 7.1, 7.2, 8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7, 8.8, 8.9, 9.1, 9.2, 9.4

4:45pm Debrief

5:00pm Finish

Note: Sessions marked with an asterix (*) have a lecture handout available in advance. Cases marked with a pound sign (£) will be distributed in advance.


Extensions

The course does not cover the following: international economics, business cycle theory, growth theory, supply-side economics.

Numeracy Skills Bootcamp

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In 2008 I was asked to provide a short, intensive bootcamp for incoming students. This page is a collection of the resources that I used for that course. It contains some slides that define and explain key concepts, and also provides some examples of numeracy tests. In addition, I noticed that many students – particularly females – felt that they “weren’t math people”. I’ve done a video to discuss these fears. I hope you find these resources helpful.

I also recommend the following page, which is full of links:


Part 1. Fundamentals of Mathematics

 

 Download the handouts here.

  • Socrative Quiz: Fundamentals of Mathematics

Additional topics:

Some fascinating ideas:

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Part 2. Practice Tests

Download the handouts here.

 

 

 

 

 

 

Additional resources:


Part 3. Gender Differences & Mathematics


Download the handouts here.

Further reading:

And remember:

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This is part of my online course on Analytics.

The Great EU Debt Write Off

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This page presents the results of a simulation conducted by students at ESCP Europe Business School. The aim was to uncover the amount of interlinked debt between Portugal, Ireland, Italy, Greece, Spain, Britain, France, and Germany; and then see what would happen if they attempted to cross cancel obligations.

The results were astounding:

  • The countries can reduce their total debt by 64% through cross cancellation of interlinked debt, taking total debt from 40.47% of GDP to 14.58%
  • Six countries – Ireland, Italy, Spain, Britain, France and Germany – can write off more than 50% of their outstanding debt
  • Three countries – Ireland, Italy, and Germany – can reduce their obligations such that they owe more than €1bn to only 2 other countries
  • Ireland can reduce its debt from almost 130% of GDP to under 20% of GDP
  • France can virtually eliminate its debt – reducing it to just 0.06% of GDP

The study has been published by the journal Simulation and Gaming.

Images by Soapbox


The idea

The idea is very simple – if Portugal owes Ireland €0.34bn of short term debt, and Ireland owes Portugal €0.17bn, we can write off Ireland’s obligations and leave Portugal with a reduced debt of €0.17bn.If you are both a debtor and a creditor you do not need money to settle claims. Rather than require additional funds to deal with choking debt, why not write it off?
The diagrams above show the before and after situation, based on analysis done by students. The simulation itself took place on May 17th 2011 and involved three separate trading rounds.

Students in the Pre-Masters Year of the ESCP Europe Masters in Management program took part in the trial run on March 22, 2011, which involved only the PIIGS countries. The key results were the following:

  • Portugal was able to cut its debt in half, primarily because so much of that debt was held by Spain.
  • Ireland reduced its debt by 99.74%, mostly through deals with Spain and Portugal. It was able to make use of trading period 3 by moving short- and medium-term debt into long-term debt.
  • Italy had a weak bargaining position, as it began with the worst debt position (a high concentration of short-term debt). After reducing debt by 50% in period 1, it was unable to make further gains.
  • Greece reduced its debt by 11% but mostly because it had little exposure to the other PIIGS countries. It was unable to make any trades after period 1.
  • Spain managed to eliminate all of its debt obligations to the other PIIGS countries, although it owed significant amounts to Britain, France, and Germany. Spain found that it could deal with everyone at the table quite equally.

Main data sources


Resources for instructors

If you would like to replicate this simulation in your classroom, download this zip file. It includes:

  • All of our data (including sources and notes)
  • The starting positions for each country
  • The results table to provide real time information to students
  • A summary sheet for students to complete each round
Please let us know how you get on!

Further reading


Media coverage


For more details or media enquiries please contact Anthony J. Evans.

Colloquium on J.B. Say

Dates and location TBA

In December 1819 Jean-Baptiste Say was one of a group of political economists and businesspeople who founded “Ecole Spéciale de Commerce et d’Industrie”, in Paris. Their practical experience and commitment to liberal ideas established a new type of academic model, pioneering the modern business school. Over the last 200 years the school has undergone a number of innovations, most notably with the merger in 1999 with EAP to form a multi-campus model operating throughout Europe. Combining a European identity with a global perspective, ESCP Europe now stands as a triple accredited and highly ranked establishment. JB Say held the first Chair in Economics, and 200 years later this colloquium uses his intellectual legacy as the host for an appraisal of his ideas and influence. 

Attendance is strictly by invitation only. Suggestions/feedback welcome – please email me.

Main reading: Say, J.B., ([1803] 1855) A Treatise on Political Economy (translation of the 4th Edition) – print copy at Amazon, or see this free pdf, or Library of Economics and Liberty.

  • Session I. On theory and practice
  • Session II. Origins of entrepreneurship
  • Session III. Say’s Law: the origins
  • Session IV. Say’s Law: Keynes’ reading
  • Session V. Say’s Law: The generally accepted view
  • Session VI. Say’s Law: The resurrection

Colloquium on Sound Money

20th-21st November 2009, London

1.    What is Money?

  • Menger, Carl, 1976, “The Theory of Money” (Chapter 8, in Principles of Economics, p.257-286)
  • Salerno, Joseph T., 1987, “The “True” Money Supply: A Measure of the Supply of the Medium of Exchange in the U.S. economy” Austrian Economics Newsletter, Ludwig von Mises Institute
  • Shostak, Frank, 2000, “The Mystery of the Money Supply Definition” The Quarterly Journal of Austrian Economics, Vol. 3, No. 4, pp.69-76

2.    The Interest Rate and Intertemporal Coordination

  • Mises, Ludwig von, 1953 [1912], The Theory of Money and Credit Yale University Press (Excerpts: Chapter 19, pp.339-367)
  • Hayek, Friedrich A., 2008 [1931], Prices and Production Mises Institute (Excerpts: Lecture 2, pp. 223-252; Lecture 3, pp.253-276)
  • Sweeny, Joan and Richard James Sweeny.  1977, Monetary Theory and the Great Capitol Hill Baby Sitting Co-op Crisis: Comment, Journal of Money, Credit and Banking, Volume 9, Feb., pp. 886-89

3.    The Gold Standard and the Great Depression

  • Rothbard, Murray, 2005 [1963], What has government done to our money? Mises Institute (Excerpts: pp.159-170)
  • Reed, Lawrence, 2005, “Great Myths of the Great Depression” Mackinac Center for Public Policy
  • White, Lawrence H.  2008, “Is the Gold Standard Still the Gold Standard among Monetary Systems?” Cato Institute Briefing Papers, No. 100

4.    Deflation and Prosperity

  • Rothbard, Murray, 2005 [1962], The Case for a 100% Reserve Dollar Mises Institute (Excerpts: Chapter 10, pp.180-186)
  • Selgin, George, 1997, Less than Zero: The Case for a Falling Price Level in a Growing Economy Institute of Economic Affairs, Hobart Paper No. 132 (Excerpts: pp.9-41; 70-72)

5.    Free Banking vs 100% reserves

  • Mises, Ludwig von, 1953 [1912], “Peel’s Act” in The Theory of Money and Credit Yale University Press (Excerpts: Chapter 20, pp. 368-373)
  • White, Lawrence H. 2009 [1984], Free Banking in Britain: Theory, Experience, and Debate, 1800-1845, Institute of Economic Affairs (Excerpts: Chapter 5, pp.89-135)
  • Selgin, George, 1997, Less than Zero: The Case for a Falling Price Level in a Growing Economy” Institute of Economic Affairs, Hobart Paper No. 132 (Excerpts: pp. 67-69)
  • De Soto, Jesus Heurta, 2006, Money, Bank Credit and Economic Cycles Mises Institute (Excerpts: Chapter 8, pp.675-714)

6. Central banking

  • Smith, Vera, 1990 [1936], The Rationale of Central Banking, Liberty Fund (Excerpts Chapter XII, pp.167-196)
  • Hayek, Friedrich A., 1990, Denationalisation of Money – The Argument Refined, Institute of Economic Affairs, Hobart Paper Special, No. 70 (Excerpts: pp.23-28, 46-55, 130-131)
  • Congdon, Tim, 2009, Central Banking in a Free Society, Institute of Economic Affairs, Hobart Paper No. 166 (Excerpts Chapter 1, pp.34-43; Chapter 8, pp.178-189)

7.    Proposals for Reform

  • Salsman, Richard, 1990, Breaking the Banks, American Institute for Economic Research (Excerpts: Chapter IX, pp. 125-141)
  • De Soto, Jesus Heurta, 2006, Money, Bank Credit and Economic Cycles Mises Institute (Excerpts: Chapter 9, pp.736-787)
  • De Soto, Jesus Heurta, 2006, Money, Bank Credit and Economic Cycles Mises Institute (Excerpts: Chapter 9, pp.788-805)

Macro bootcamp

Updated: March 2018

The Macro Bootcamp is a short and intensive reading group that serves as a refresher for a graduate level class in contemporary macroeconomics. It aims to cover the seminal texts of the most prominent schools of thought, and act as a foundation for applications to current policy debates.

1. Advanced reading

Participants are advised to read the following book, which provides an excellent introduction to modern macroeconomics from a school-of-thought approach. The interviews at the end of the book in particular are worth attention:

2. Reading list: key articles

Note: this reading list is heavily influenced by Tyler Cowen’s Macro I Reading List, Fall 2006 (.pdf). For a previous version of that, see here.

History of thought/background

Real Business Cycles

New Keynesian economics

Monetary policy

3. The podcast

Here is an audio version of my own lecture notes:

4. Further reading

The classic graduate text for macro is David Romer. It is the best treatment of the alternative growth models, and then has a chapter on each variable of national income accounting. Participants are advised to grapple with it after the bootcamp has taken place.

It is also a good idea to see how various Austrian, Keynesian and Monetarist ideas can be integrated into a heterodox narrative. See Arnold Kling’s “Lectures on Macroeconomics“.

Note: the lectures above feed into the Monetary Theory and Policy Workshop