Lec 7 = The RECAP LECTURE Flashcards
What are the most important elements on the economics of crime?
*Criminals as rationalactors.
*Deterrence of crimes possible if expected punishment > benefits.
*Fines vs incarceration.
*Judgment proof criminals, fixed fines and day fines.
*How much crime reduction should be achieved in the society? And why it is not 100%?
*Evidence stemming from RCTsand natural experiments suggest that the deterrence theory works.
*Behavioural challengesto the deterrence theory
What are the most important elements of Nudging?
*People make systematic errors in their judgments and decisions due to behavioural biases (e.g., availability, status quo).
*These biases can be corrected for or used in order to help people make the right decisions àBehaviourally informed policies.
*Nudging is one such approach. The idea of nudging is to help people make better(welfare enhacing) decisions by altering their choice architecture without forbidding any options or changing economic incentives. E.g., default vaccine appointment
What are the most important elements on the Economics of Climate Change?
*Climate change has important short-term economic consequences and, if left unmitigated, it might have severe long-term economic effects. Application: neoclassical growth model.
*By employing market failures rationale (externalities, public goods—economics can explain the failure to preserve environment.
*The economic way of thinking is useful for setting the desired level of abatementand designing optimal climate policies to suppress market failures. Abatement cost curve, feasible set, public preferences, climate change mitigation policies
What are the most important elements of the economics of war and conflict?
*Causes of militarised conflicts: the opportunity costs framework.
*Militarised conflicts have substantial short-and long-term economic consequences on the macro-level (economy as the whole: economic growth, inflation, public debt). Neoclassical growth model, aggregate supply and aggregate demand model.
What were the most important elements on economic wars?
*Military interventions and economic sanctionsare perceived as strategic substitutes.
*There are some discrepenciesbetween the economicimpactof sanctions and their political success.
*Economic wars also include trade wars.
*New impetus for deglobalisationdue to security reasons. Tendencies for “reshoring” and “friendshoring
