Question

Globalization

1. Describe an ideal measure of globalization for goods or factors of production.   Use a graph in your explanation.   What are compromise or commonly used measures?
2. Why have Americans reacted more negatively towards trade than, say, Europeans?

Climate Change

3. Write down the Ramsey equation.   Use it to explain why the Stern Report recommendations differ so dramatically from those made by Nordhaus.
4. What value (negative or positive) do parents sometimes appear to place on the pure rate of social preference?

The Economics of Crime

5. What is the incapacitation effect?   What is the evidence on this effect?
6. Evaluate the following statement: in general, the optimal level of crime is zero.

AI and Employment

7. What does Polanyi’s paradox imply about the ability of machines to replace human labor?
8. Explain the following statement: technology eliminates jobs but not work.

Immigrants and Crime

9. Immigrants are also victims of crime.   What two types of crimes were discussed in the presentation?
10. Are newly arrived immigrants more prone to crime?

Corporate Taxes

11. The analysis of the Joint Committee on Taxation suggests that the U.S. is on the left-side of the Laffer Curve. What does this mean?
12. What is the difference between the marginal corporate tax rate and the marginal effective corporate tax rate?

Answer 1

Answer 1 : The term Globalization is so powerful such that it’s difficult to create a compact definition of it. It may be defined from different perspectives and in several ways. One can say
Globalization refers to the combination of Economics and Societies all over the world. It connects technological, economic, political, and cultural exchanges made possible by the progress in transportation, infrastructure, and communication. An alternative definition would be increasing
linkages between the world, including the international spread of cultures as well as diseases and crimes, while natural and artificial barriers between nations fall. Finally, the most well-known definition is referring to Globalization as the shrinking of the world into a global village, as borders disappear, distance decreases, and time shorten.

Globalization refers to the integration of economics and societies all over the world.
There are two kinds of Integration, Negative and Positive.

Positive Integration concentrates on standardizing international economic laws and guidelines.

For Example, A country with its own set of Policies on tariffs with a country which has its own policies on taxation find ways of trading together. With Positive Integration, and the expansion of globalization, these countries work to have
related or even equivalent policies on tariffs.

Negative Integration is the elimination of trade barriers or defensive barriers as quotas and tariffs. The removal of barriers can benefit a country if such removal is for products that are necessary for the economy.

For Example, by breaking down barriers, the total cost of imported raw material will decrease as the supply goes up, making it cheaper to produce the final product for
export (Car parts, clothes etc.). On the other hand, the total cost of importation will also decrease.

There are a number of other factors that make rapid international expansion a necessity, rather than an option to be reviewed when the time is right. Those factors include the following:

Market transparency - In the good old days, 8-10 years ago, software companies could develop a product, market it at home, and then quietly start to sell their technology in overseas markets, often going after one market at a time. With the Internet, however, a product or a business concept is there for everyone to see, as a result, competitors in overseas markets are able to replicate the product or service. There have been many cases of U.S. companies going to Europe, only to find that their business model, their name and even their Website have been replicated.

Emerging markets - While the U.S. is still the dominant force in technology development, we today
see a lot of innovation from new markets such as Sweden, Israel, South Africa, India, Singapore and
China. Quite often, the levels of innovation displayed are impressive, this implies that the U.S. companies will be facing new competitors not from other advanced countries, but from the emerging ones and targeting the same markets. This will increase the competition for clients and channels of
distribution, all the benefit of the average consumer World Wide.
Geographic diversity - There are three major trading blocks in the world economy: North America,
Europe and Asia - Pacific. These major trading blocks, don’t move up and down in the same time as they are the most affected ones in the market, so a company can make itself less vulnerable according to the demand in one region by having a diverse source of revenues. This emerged after the Internet bubble and the technology of telecom. The European market, while slowing down, was not hit as hard as the U.S market, so companies with significant operations in Europe were able to partially offset the slower sales at home.

Americans are promoting and Europeans are resisting globalization.

In the first place, several high-profile U.S.- European disputes on agricultural subsidies, bananas, American films, steel, pasta, hormone beef, and more have received substantial attention in the press. Some of these disputes lend themselves to the impression that the United States is trying to force something on the Europeans to make small family farms unviable, to stop favoring former colonies, to watch American films, to eat beef grown with hormones. But this exaggerated image does not resonate deeply with the public. The media hype has made the disagreements seem fundamental and enduring when infact theyy are little more than intrafamily conflicts over which side is going to make more adjustments within a fairly consensual broad framework and set of values.

Attempts to understand the attitudes of the publics on both sides of the Atlantic are complicated by the strident voices of vocal groups who are suffering the negative consequences of globalization or who are sympathetic to those who are. Sometimes these groups are taken as representative of the general public.

But in fact the American and European publics seem to agree that globalization is more positive than negative. At the same time, both are uneasy about the impact of globalization, especially on workers. Both desire to keep some trade barriers for now, at least long enough to help workers adapt to the changes that globalization entails. To reassure both publics, it will probably also be necessary to address globalization’s effect on workers in developing countries and on the environment as well. The United States and Europe will probably continue to engage in periodic disputes over exactly how to address these concerns, but the disputes should not obscure the shared underlying support on both sides of the Atlantic for the broader process of globalization.