Week X: Micro, Meso, Macro
Levels of analysis in economics
Micro, meso, macro
Micro: choices of individual units (internal stakeholders, mainly, consumers and producers)
Macro: behaviours of aggregates (income, unemployment, inflation)
Meso (sectoral): An intermediate level of aggregation, grouping firms within the same industrial sector
On methodological individualism
In economics reducing ll societal phenomena to this had proved either too difficult or simply misleading. Models of the national economy based on individual sessions are consistently worse than purely aggregate analyses
Economic Growth and Development
The growth patterns of economic powerhouses suggest that within the richer countries in the world, there is a negative relationship between former GDP and future growth. Essentially the poorer countries become the ones to show exponential amounts of growth. However it is not a globally applicable phenomenon.
Economic Growth
Rate of change of aggregate income
no structural change: the contribution of sectoral income to aggregate income is assumed to be constant
Economic Development
Income increases, but with different sectors growing at different rates
In other words, non-proportional growth
structural change
Economic improvement can be motivated but specific sectoral investment