some homework readings shit

domestic value added

value of producing g/s for export

foreign value added

inputs that were imported in order to produce intermediate or final g/s to be exported

billateral relationship

importing and exporting with the same country

increasing returns to scale

producing extra units of a good becomes cheaper if you operate at a larger scale

economies of scale

firms that can export to the world face larger demand, and
under the right conditions, they can operate at larger scales
where the price per unit of product is lower

inter-industry trade

countries exported goods that were very different to what they imported

intra-industry trade

the exchange of broadly similar goods and services is becoming more common

difference between traded goods and traded merchandise

traded goods = including goods simply being transported
through a country (i.e. goods in transit); traded merchandise is excluding

Summers: "Costs of pollution are non-linear"

cheaper to pollute “under-polluted” countries

negative impact on health/environment has

high income-elasticity

currently moving from complicated to
complex societes

interactive, interconnected and interdependen

emerging markets are pushing the world into

a multipolar order(more than one dominating countries)

degrowth

‘prosperous way down’ to a society in which less material wealth, but more social equality&freedom are valuable -> utopian

deglobalization

is NOT isolation or nationalism, shifting focus to national markets

degrowth is ..., deglobalization is...

goal; direction

spill-over effect

domestic policies may effect international markets

why can foreign aid be harmful?

creates corruption and dependency, leads to currency overvaluation

how could increase in foreign aid help battle poverty

by investing into specific interventions like anti-malaria programmes

Marshall plan + Truman(1940s US)

‘Four point speech’, “foster growth of underdeveloped areas”

effect of foreign aid on economic growth in developing economies

not large enough to be significantly different from zero

‘programme ownership’

cooperatipn with recipient governments for design and form of aid programmes

reverse casuality

slower growth in very poor countries may attract additional aid

‘Dutch-disease’-related models

increase in one economic sector leads to decrease in another

macro-prudential regulations

avoiding destabilising forces and currency crises

most of extremely poor people live in

sub-saharan Africa

large lump of people below the poverty line

=faster progress(able to pull ever more people over
the line for every point of growth)

Stern

1.4 discount rate, ethicist approach

Nordhaus

5.5 discount rate, positivist approach

Lind(money transfers to the future)

might be efficient to invest in projects even with 0 interest, as we don't know how to transfer resources long-time; however!intervening generations

Reversz(human lives can't be discounted)

discounting doesn't take into consideration risks to life and health by climate change; however!we are discounting money, not lives

Parfit(discounting doesn't compensate all harm)

in general, discounting correctly allocates resources, but still undermines some risks(e.g genetical deformations bc of climate change); however!this isn't about discounting, even short-term projects can be harmful

social discount rate

how much the future must get if we decrease consumption by one unit

with increase of consumption, the marginal benefit of additional consumption

decreases by a constant rate n

social discount rate formule

p=nc+b
c=rate of growth of economy, n=inequality parameter(the higher, the less we care about future generations), b=rate at which we discount welfare of future generations (unethical to be positive)

difference between UBI and UBS

fungibility, UBS criticized as not respecting consumer sovereignty and market democracy

conventional economic theory

individual wants from both inner preferences and cultural/environmental surroundings

capability approach(by Amartya Sen)

human wellbeing=range of substantive freedoms and opportunities that humans have(extent to which people are free to choose to live one type of life or another)

10 'human functional capbilities'

core ones - affiliation, bodily integrity and practical reasons; life, bodily health, senses, imagination and thought, emotions, other species, play and control over one's environment

human need theory

well-being can't be reduced to unitary measure -> SDG

universality of needs

if basic needs aren't satisfied, it'll result in serious harm

Theory of Human Need

basic needs of participation, health and autonomy must be met for people to participate in society

economy should be viewed as network of systems of provisions

where links between production and consumption are structured in distinct ways – different physical and social elements + different structure and dynamics

material foundational economy

directly delivering essential need satisfiers (pipe and cable utilities, food production, transport infrastructure)

providential foundational economy

material FE+entire welfare state(education, healthcare)

mundane services

taken for granted until they fail

collective provision to meet intrinsic needs is based on:

equity, efficiency, solidarity and sustainability

social wage

value of free and accessible public services

problems of competitive markets for public services

transaction costs(administrative, policing), large economies of scale (natural monopolies)