Workbook To Accompany Political Economics

This book accompanies Political Economics: Explaining Economic Policy and sugggests solutions to the problems contained in each chapter.

Most of economics takes politics for granted. Through some (often implausible) assumptions, it seeks to explain away political structures by characterizing them as stable and predictable or as inconsequential in understanding what goes on in an economy. Such attempts are misguided, and this book shows how governments and political institutions are composed of people who respond to incentives and whose behavior and choices can be studied through the lens of economics. This book aims to bridge the gap between economics and politics, and in doing so hopes to instill in the reader a deeper appreciation for social scientific thinking. Opening with a refresher on microeconomics and an introduction to the toolkit of political economy, it ensures that the necessary building blocks are in place before building up from the level of the individual and the firm to show how a political–economic equilibrium can be achieved. The text explores how to separate primitives—the external parts of a model that we cannot affect—from outcomes—the internal parts of a model that we can. Moreover, it demonstrates that economic and political issues alike can be studied within the same general framework of analysis. Political Economy and Policy Analysis offers readers the chance to gain a more sophisticated understanding of political processes, economic processes, and the interplay among them. Adopting an applied microeconomics approach, it will be ideal for upper-level undergraduate or postgraduate courses on political economy, public choice, or policy analysis. A complementary workbook with exercises and solutions that accompanies Political Economy and Policy Analysis is available for download under the eResources tab at: https://www.routledge.com/Political-Economy-and-Policy-Analysis/Merlo/p/book/9781138591783.

The Political Economy Reader advocates a particular approach to the study of political economy – the "market-institutional" perspective – which emphasizes the ways in which markets are embedded in political and social institutions. This perspective offers a compelling alternative to the market-liberal view, which advocates freer markets and less government intervention in the economy, as if states and markets were naturally at odds with each other. The reader embraces a truly interdisciplinary approach to the study of political economy, with extensive coverage from sociology, economics, history and political science. It includes some of the most important classical and contemporary theoretical perspectives on political economy. And it engages some of the most topical debates in political economy today, such as climate change, the global financial crisis, inequality, the digital platform economy, and the COVID-19 pandemic. For political economy courses at a variety of levels and from a range of disciplines, the reader is also of interest to scholars and citizens wanting perspective on the intersection of economics, politics, and society. New to the Second Edition • More than 20 new readings included by such notables as Elinor Ostrom, E. J. Hobsbawm, Dani Rodrik, Amartya Sen, Thomas Piketty, and Mariana Mazzucato among many others. • Fully updated introductions to the book and each thematic chapter of readings. • Coverage of key emerging debates including climate change, the financial crisis, inequality, the digital platform economy, and COVID-19

This book provides the reader with the full panoply of political economy tools and concepts necessary to understand, analyze, and integrate how political and social factors may influence the success or failure of their policy goals.

5.2.1 A Basic Model of Coordination Traps: Investment in Developing Countries