macro economy

Students, Below is your final.  I set up a "Turn It In" dropbox.  I've never used this before, and I want to know how it works.  Please let me know if you have any trouble.   QUESTION SET A  Question A 1. Mishkin and Rogoff both have ideas about the costs and benefits of financial globalization.  Furthermore, you may be able to make some inferences about what Kling would think of financial globalization.  Given that, consider the following questions:   •    Why, according to the authors, might an international institution succeed when domestic institutions cannot. •    What would an international institution do in a crisis? •    What benefits would an international institution provide to the global financial community? •    What are the disadvantages of creating a strong international financial institution to help with financial crises? To get an A on this question, you must try to interject what you THINK Kling would say about these topics on an international level, even though his essay (Not What They Had in Mind) focused on the US.

To answer this question use the following articles

Read Mishkin’s article about global financial instability.

http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.13.4.3

Read Rogoff’s article about global financial instability.

http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.13.4.21

Read Arnold Kling’s history of the policies that created the great recession

http://mercatus.org/publication/not-what-they-had-mind-history-policies-produced-financial-crisis-2008

 

 

Question A2. 

Listen to these:

http://www.econtalk.org/archives/2009/12/kling_on_prospe.html

 

http://www.econtalk.org/archives/2008/01/munger_on_the_n.html

Munger discussed the nature of the firm, while Kling discussed the nature of progress.  First, carefully discuss Munger’s view on why firms exist.  Then discuss Kling’s view on progress. Then discuss how these two fit together.  How, in other words, have firms been able to keep up with progress?  (In other words, how has managing a firm (especially it personnel) changed in the last 100 years.)  

QUESTION SET B    Question B1.   Both Lucas and Taylor believe that monetary stimulus can influence the real economy in the short run.  However, they explain the way that money achieves this in very different ways.  What is similar and different about Lucas and Taylor’s transmission mechanism?

To answer read the below articles

Read John Taylor’s article about monetary transmission mechanisms.

http://web.econ.unito.it/bagliano/ecmon_readings/taylor_jep95.pdf

Read Lucas’ Noble lecture on monetary neutrality.

http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1995/lucas-lecture.pdf

 

 

Question B3. Mishkin gives a good explanation of what banks do.  So, what do banks do?  (Bank=financial system.)  What happens when banks can’t do what they do?  In your answer, be sure to discuss asymmetric information.

To answer read the below article

Read Mishkin’s article about global financial instability.

http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.13.4.3

and you can use those two links for help

https://www.mruniversity.com/courses/principles-economics-macroeconomics/banks-financial-intermediaries

https://www.mruniversity.com/courses/principles-economics-macroeconomics/failure-financial-intermediaries