Notions Economiques Anglais

Chapitre 11

Pareto Optimality: An economic state where resources cannot be reallocated to make one individual better
off, without making at least one individual worse off.

Information economics or the economics of information is a branch of microeconomic theory that studies
how information and information systems affect an economy, economic decisions, and economic agents,
does have an impact on transactions.

Chapitre 12

Supply and Demand: in economics supply is the amount of a product which is available to customers. And
the demand is quantity of a good that consumers are willing and able to purchase at various prices during a
given period.

- For example, the supply for a University is: the professors.

- Demand for a university is the number of students that want a coach or an economic professor.

Quantitative measure: it is something that we can measure/ calculate with numbers or statistics.

Chapitre 13

Economic called ‘dismal1 science’: cause according to a lot of people it is a boring science. Also, for Carlyle,
economic mechanism is threatening established social order. Free Market and the need for sheep labor is for
him like slavery.

Carlyle is Scottish historian, philosopher, and mathematician. Carly worried that a market economy would
reduce the authority of the English ruling class.

Free market: is a theory that says that it damages the social structure of 18th century in England, by
‘reducing the authority of the English ruling class’.

Difference between economic period:

- Liberals: the market regulate itself (the theory of the invisible hand) à there is a little state
intervention
- Monetarist: control quantity of money, the supply/demand in the economy.
- Keynesians: ex: the new deal policy in the 1930s

Keynesianism:

- Emphasizes the role that fiscal policy can play in stablishing the economy.
- Suggest that higher government spending in a recession can help enable a quicker economic
recovery
- Keynesians say it is a mistake to wait for markets to clear as classical economic theory suggest

Monetarisms:

- Emphasizes the importance of controlling the money supply to control inflation.

- Critical of expansionary fiscal policy arguing that it will just cause inflation or crowding out and
therefore it is not helpful.
- It is better to wait for the market to clear its own.

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Pessimistic, sad, dark
Chapitre 15

The Veblen effect: An increase of prices means a rise of demand, especially for upper class consumer and
luxury goods.

Veblen theory: Theory of Leisure (Loisir) class: the theory of Leisure Class: an economic study of institution
(1899), done by Thorstein Veblen, is an economic treatise and detailed social critique of conspicuous
consumption, as a function of social-class consumerism.

Conspicuous consumption:

Carlyle’s critical analysis of economics as simplistic and repetitive science focused on supply/ demand, may
mean that it lacks innovation/ new ideas.

The impact the demand for art and do a quick research on Thorstein Veblen:

- Income
- Price
- Price of Complement (ex: the frame: le cadre)
- Price of substitutes (ex: a print, a poster)
- Taste

Chapitre 16

Incentives affect behavior: as a social science, economics focuses on human behavior and incentives can
explain much of it. They impact the decisions we make to achieve satisfaction, maximize our utility such as:

- Remunerative (ex: bonuses)

- Moral (ex: respecting your promises)
- Financial (ex: taxes)
- Coercive (ex: respecting the law)
- Social (ex: having friends)
- Ensure repeat business to feed+ clothe his family.

Incentives are what motivate people to behave in a certain way.

Chapitre 17

Economics is a study of causation, not coincidences: economic is based on a real data that leads to
consequences. It is more useful to establish and explain causation between economic variables.
Coincidences (chance, accident) and simple correlation is outside the fields of economics

“Economic explains the hidden logic between events”

Gains from trade: Gains from trade allow two countries to import what they need and export what they
produce more efficiently.

Paradox in Frank Knight’s: The Martians would have to believe the mercantilist myth that a nation benefits
from exports and suffers from imports. 5Knight is pointing out the absurdity of the position).

One myth: exports benefit a nation, imports hurt it.

In fact, exports are the cost of imports, Jeff Koons became an artist, working in finance in 90’s. It takes him 2
years to conceive and develop his idea, and 2 years to produce the work of art.

Countries want to export but not import.

Chapitre 18
Being an Anti-Market: it is somebody who is opposing to free market, the are calling for State intervention
in domestic markets and in trade, rejects neoliberalism, believes in state intervention.

Marxist labor theory of value: Value can only be created by work. To measure it, you need to measure the
quantity of labor used to produced something.

Chapitre 19:

Auction Theory: Applied branch of economics, which studies how people behave at an auction and the
specificities of auction markets (ex: type of goods sold).