The Snails' Book Club discussion

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Principles Of Economics Mankiw > Discussion On Principles Of Economics by N. Gregory Mankiw 6th Edition

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message 1: by Sang (new)

Sang | 58 comments Mod
We will start to read the book from 11th July.


message 2: by Karen (new)

Karen | 27 comments I am ready!


message 3: by Hwy6896 (last edited Jul 10, 2016 05:03AM) (new)

Hwy6896 | 1 comments These planners lacked the necessary information about
consumers’ tastes and producers’ costs, which in a market economy is reflected in prices.

Central planners failed because they tried to run the economy with one hand tied behind their backs—the invisible hand of the marketplace.

with one hand tied behind their backs --------how to translate?


message 4: by [deleted user] (new)

with one hand (tied) behind one's back :
With serious limitations or restrictions: ‘at the moment, the police are tackling record crime rates with one hand tied behind their back’

这个谚语一语双关,和“市场之手”对应巧妙。

Hwy6896 wrote: "These planners lacked the necessary information about
consumers’ tastes and producers’ costs, which in a market economy is reflected in prices.

Central planners failed because they tried to run t..."



message 5: by [deleted user] (last edited Jul 12, 2016 07:12AM) (new)

I think market economy is very important especially for our country which uesd to be an anti-market communist state.

The seclution policy(闭关锁国) of the communist countries is proved to be wrong by history.It cannot promote economic growth and social welfare.

I am perticularly touched by this sentence written by Adam Smith:
"By pursuing her own interest she frequently promotes that of the society more effectually than when she really intends to promote it."

I am a feminist so I rewrited this sentence by replacing "he" with "she". I can also ues "they" or "s/he" or "she/he" in place of "he". It's gender-neutral language which is very important in academic writing.

So here is my opinion: governments which propagate "collective interests" and/or "individual sacrifices" are tyranny.
Governments are instituted to serve individuals; not vice versa.


message 6: by S.J (new)

S.J | 2 comments Principle 8: A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services
The fundamental relationship between productivity and living standards is simple, but its implications are far-reaching.
The relationship between productivity and living standards also has profound implications for public policy. To boost living standards, policymakers need to raise productivity by ensuring that workers are well educated, have the tools needed to produce goods and services, and have access to the best available technology.
Principle 9: Prices Rise When the Government Prints Too Much Money
What causes inflation? In almost all cases of large or persistent inflation, the culprit is growth in the quantity of money.
Principle 10: Society Faces a Short-Run Trade-off between Inflation and Unemployment
Most economists describe the short-run effects of monetary injections as follows: • Increasing the amount of money in the economy stimulates the overall level of spending and thus the demand for goods and services. • Higher demand may over time cause firms to raise their prices, but in the meantime, it also encourages them to hire more workers and produce a larger quantity of goods and services. • More hiring means lower unemployment.


message 7: by Karen (new)

Karen | 27 comments Answer for question a:
It is obvious the first goal will increase equality on healthcare insurance, especially for the lower-income households. Healthcare is referred as scarcity here. People or household at different income level can have the benefits of healthcare uniformly.
As for efficiency, it is affected in two ways. By reducing the cost for healthcare, the maximum benefits of it will also decrease. However, since more Americans will pay health insurance and more subsidies financed by tax from higher-income households will be paid, the maximum benefits will increase in another way.
Answer for question b:
Individual mandate makes more Americans to pay for the insurance, then these Americans will have to work more hours than before. More Americans and households will go to see doctors more often, doctors and hospitals will produce more services. These will increase the productivity.
Answer for question c:
Since taxes on higher-income households will be financed as the subsidies, these higher-income people will turn less willing to work more. Thus the productivity will decrease.


message 8: by [deleted user] (new)

In 2010, President Barack Obama and Congress enacted a healthcare reform bill in the United States. Two goals of the bill were to provide more Americans with health insurance (via subsidies for lower-income households financed by taxes on higher-income households) and to reduce the cost of healthcare (via various reforms in how healthcare is provided).

a. How do these goals relate to equality and efficiency?

my answer:

Equality is the property of distrib­uting economic prosperity uniformly among the members of society. One of the goals of the healthcare reform bill is to provide more Americans with health insurance, therefore it will promote the equality of the benefits of healthcare among Americans.

Efficiency is the property of society getting the most it can from its scarce resources.One goal of Obamacare health plans is to reduce the cost of healthcare.And the decrease in price of healthcare demands an increase in efficiency if the healthcare organizations were to keep the same service standard.



b. How might healthcare reform increase productivity in the United States?

The healthcare reform were to provide more citizens with healthcare services,so more people will get healthier and thus have a longer life expectancy.In this regard,they are likely to perform better at work and have longer workable years.As a result,productivity in the U.S. will increase.

c. How might healthcare reform decrease productivity in the United States?

By taxing on higher-income households to subsidize the healthcare cost of lower-income households,the reform bill may make the rich less enthusiastic about investing in business and making profits in order to avoid taxation.Consequently there may be a decrease in productivity.


message 9: by Sang (new)

Sang | 58 comments Mod
To Yin:

I agree with your answers for question A and B. But for question C, I feet the link between decline of investment and decline of productivity is weak.

Productivity refers to the amount of goods or services produced from each unit of labour input.

To establish link between investment and productivity, maybe we should say that less investment means less houses, roads, vehicles, machines. Less of infrastructure and less tools will lead to more difficult process to product goods or service. Therefore, one unit labour will produce slower, lesser. And this will result in decline of productivity.

I have another answer in my mind. I think that government subsided health insurance means government will pay for health care cost for many people. Pharmaceutical companies will be assured that they will have steady supply of orders and there are no worries of bad debts and default. Demand will be less sensitive to prices. Pharmaceutical companies will have less pressure to improve and innovate to bring down cost of drugs. This will cause decline of productivity in long term.


message 10: by Sang (new)

Sang | 58 comments Mod
Karen wrote: "Answer for question c:
Since taxes on higher-income households will be financed as the subsidies, these higher-income people will turn less willing to work more. Thus the productivity will decrease. "


This is another answer to question C. It is very insightful.


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