APPLIES TO ACADEMIC YEAR 2015/2016 Norwegian version

ELE 3742 Market, crises and environment

Responsible for the course
Atle Andreassen Raa

Department
Department of Innovation and Economic Organisation

Term
According to study plan

ECTS Credits
7,5

Language of instruction
Norwegian

Introduction
The course addresses key themes and recurring issues in economic organization over the past 250 years. The starting point is Adam Smith's view of the market economy in his groundbreaking work The Wealth of Nations, published in 1776. Then will be presented what later economists have said about the same topic. The course's pervasive theme is the market economy's opportunities and problems related to business, government and the individual's role and behavior in society. Modern economic theory that also explain the functions of the markets from information conditions and psychological factors are also taken up.
How one can handle financial crises, environmental and resource challenges and unequal income distribution issues in a market economy will be also discussed in reation to the ideas that are presented in the course.

Learning outcome
Acquired knowledge
After completed course students should have:

• Obtained kowledge of what are the basic mechanisms of a market economy, as Smith described it.
• Become aware of the assumptions that lay behind Smith's model
• Acquired knowledge of the consequences of different production and consumer conditions for how a market economy works
• Acquired knowledge of the factors that can influence a market economy over time, especially the impact of new technology and other changes in production conditions, and income conditions and consumer habits
• Gained further knowledge of what should be the role of government in a market economy, including the hoe the resource and environmental challenges can be met in the best possible way.
• Learned about the role of information and communication for the market economy, including the effects of asymmetric information in markets.
• Learn about the assumptions about behavior behind our actions in the markets, including full and limited rationality and the role of economic and social incentives play.
  

• Assess and discuss the market economy's strengths and weaknesses as seen from the point of wiev of different interests in society.
• Able to see the current economic problems and proposals and how these can be handled according to economic theory.

• develop greater awareness of the importance of economic institutions, economic organization and economic behavior of the public sector, business and other organizations and individuals in the society.
• develop the ability to utilize theory and practical knowledge in combination in order to reflect on what are the consequences for society, business and individuals of various forms of economic organization and human behavior in markets.

1. Adam Smith. Invisible hand and the free market.
2. David Ricardo, free trade, comparative advantage and protectionism
3. Alfred Marshall and the neoclassical theory of perfect competition
4. Thorstein Veblen and the critique of neoclassical theory
5. Joan Robinson and the theory of imperfect competition
6. John Maynard Keynes' views on why crises occur. Paul Krugman and nykeynesianismen.
7. Karl Marx and Joseph Schumpeter's view of why crises occur.
8. Alfred Pigou and recent environmental economists.
9. Friedrich Hayek, Milton Friedman and the market-friendly economists in the postwar period
10. Joseph Stiglitz, George Akerlof et al. the consequence of the lack of information in the markets.
11. Robert Shiller and otjers on the cause of the financial crisis in 2008.
12. Summary and synthesis of course content. Exam Preparation