Part Two: Market
Economies
4. How a Market System Works (Jan 30)
Chapter 3, "How a Market System Works"
Smith, Adam "The Wealth of Nations", in Kennett and Lieberman, The Road to Capitalism, (Dryden Press, 1992), Chapter 7, pp. 66-70. This piece consists of selected excerpts from his 1776 classic An Inquiry into the Nature and Causes of the Wealth of Nations.
Lipsey et al., "What Markets Do", in Kennett and Lieberman,Chapter 8, pp. 71-79.
Friedman, Milton "Economic and Political Freedom", in Kennett and Lieberman, Chapter 9, pp. 79-87.
Questions for the Paper due Feb 10
REMEMBER YOUR CHOiCE OF ECONOMY IS DUE February 10
Chapter 4, "Market Failure and Government Failure"
Kruger, Ann, "Economists' Changing Perceptions of Government" in Bornstein, Morris Comparative Economic Systems: Models and Cases, Seventh Edition, Irwin Press, reading # 5, pp 78 -91.(File).
Many of the issues of performance of government owned enterprise in the productive sector are addressed in the World Bank book Bureaucrats in Business: the Economics and Politics of Government Ownership. Direct link to the report (.pdf) is here.
6. The Institutions of a Modern Market Economy (Feb 6)
Chapter 5, "The Institutions of a Modern Market Economy"
Kennett, David "The Role of Law in a Market Economy", in Kennett and Lieberman, pp. 97-109.
Corrigan, E. Gerald "The Role of Central Banks in Emergent Market Economies", in Kennett and Lieberman, Chapter 14, pp 120-131.
World Bank Development Report 2001, Chapter 4 Financial Systems