2017-01-18 econ 113 slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfjan 18, 2017 ·...

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NEWS FLASH!! According to our very young Danny Yagan… We are #1 in upward mobility >est share of people from <20%ile —> >99%ile UCLA is #2 America used to be a place of exceptional upward mobility Not the case for those born > 1955 or so…

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Page 1: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

NEWS FLASH!!• According to our very young Danny Yagan… • We are #1 in upward mobility >est share of people

from <20%ile —> >99%ile • UCLA is #2 • America used to be a place of exceptional upward

mobility • Not the case for those born > 1955 or so…

Page 2: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

Economics 113 Slides

J. Bradford Delong http://bradford-delong.com [email protected]

@delong

2017-01-18

KNT: https://www.icloud.com/keynote/0LdLCURat7wHXwlQpuyTENh1Q#2017-01-18_Econ_113_Slides

Page 3: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

Outline• NewsFlash:BerkeleyandOpportunity• Lecture:TheStoryofAmericanEconomicHistory

• Lecture:BigIdeas• CourseMechanics• WhoAreYou?• Assignment:LettertoLecturer

Page 4: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

A Story from American Economic History• Born on the prairie • Young man on the

make • But in Russia—not

America • Lev Bronstein • Leon Trotsky • Lenin’s right hand in the

Bolshevik Revolution • People’s Commissar for

Foreign Affairs

Page 5: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

“The Foundry Where the Future Will Be Forged”• Trotsky left New York

in March 1917 for St. Petersburg, Russia

• Left with some regret • The history of the

United States is of more than parochial interest

• It is not the case that the U.S. shows the rest of the world the image of its own future • Nevertheless…

Page 6: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

BIG IDEA #1: Narrative• We like stories. • It is how we think. • We are jumped-up East African Plains Apes, only

3000 generations removed from those who first developed language, trying to understand the world as monkeys with, as Winnie-the-Pooh would say, "very little brain".

Page 7: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

BIG IDEA #1: Narrative II• To place ideas and lessons in the context of a story

is a mighty aid to our thinking. And history and its narratives are how we do that.

• That is the first BIG IDEA of this course: historical narrative is a mental force multiplier for your brain…

• Disciplines that do not take a historical approach and ideas that do not admit of a narrative historical presentation are crippling themselves…

Page 8: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

BIG IDEAS• We are animals that live by narrative—hence by history… • There are three American nationalisms:

• The City Upon a Hill: “Let it be as it was in New-England…” • A place where we can live freely… • “But here was Old Kentucky!”

• The American project has been astonishingly successful—in Trotsky’s words: “the furnace where the future is being forged…”

• But the American project has been much worse than shadowed by plantation slavery and its echoes down the centuries…

Page 9: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

BIG IDEAS II• One big contributor to the success of the American

project has been immigration… • American society has generated a large—in

comparative context—but unevenly distributed quantum of liberty…

• American society used to deliver an unusually large quantum of opportunity—but not any more…

• American society has delivered an unprecedented and unequalled quantum of prosperity

• The story of industrialization requires focusing on growth-oriented industrial policy…

Page 10: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

BIG IDEAS III• The story of industrialization requires focusing on

societal well being-oriented industrial policy… • The story of opportunity and prosperity is the story

of our two Gilded Ages: their rise, fall, and rise • The apogee of American success is the mid

twentieth century era of social democracy • Society has moved from agriculture to industry to

post-industrial services, and is now moving on to ?… • Much of what has gone wrong with America can be

traced to regional geography—and to the cultures that entrenched themselves in that geography…

Page 11: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

Learn More About Trotsky?• Want to? • IMHO, the best places to start are with two books:

• The relevant sections of Edmund Wilson (1940): To the Finland Station: A Study in the Writing and Acting of History (New York: Farrar, Straus and Giroux: 0374533458) http://amzn.to/2jc1t88 z

• Leon Trotsky (1930): My Life: An Attempt at Autobiography (New York: Scribner: 0873481445) http://amzn.to/2jbLh6M https://www.marxists.org/archive/trotsky/1930/mylife/

Page 12: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

We Have a Lot to Do! Let’s Get Started!• Comments? • Questions?

Page 13: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

CourseMechanics• Grades:• in-classfinal(30%)FrMay123-6pm• twoin-classmidterms(15%each)• Midterm1:Feb15• Midterm2:Mar22

• in-lectureiClickerquestions(10%)• section-basedwritingandcalculationassignmentsonthereadings(15%)

• sectionparticipation(10%)• lectureparticipation(5%).

• WeanticipatethattheclasswillworkhardenoughtomakethemedianaB+.• Thatisinyourcollectivecontrol.

Page 14: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

CourseMechanicsII• LecturerOfficeHours:DeLong691aEvansHallbyappointment,plusdrop-inhoursstillinflux.Emaildelong@econberkeley.edutomakeanappointment.

• GSIOfficeHours:TBA…• Admission:Outofourhands…• iClickers:stillanexperiment…

Page 15: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

ToYouriClickersWhereshouldIhavemyofficehours?A. EvansHall691aB. BlumCenterC. StudentLearningCenterD. Don’tCare…

Page 16: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

ToYouriClickersWhenshouldIhavemyofficehours?A. MondaylunchB. EarlyTuesdaymorningC. LateTuesdayafternoonD. WednesdaymorningE. Thursdaymid-day

Page 17: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

CourseMechanicsIII• Lecture:MW5:10-6:[email protected]• Sections:101M8:00amDwinelle242.102M4:00pmEvans3.103Tu8:00amDwinelle228.104Tu9:00amDwinelle205.GSIs:[email protected];[email protected]

• CourseWebsite:https://bcourses.berkeley.edu/courses/1456905• Syllabus:https://www.icloud.com/pages/08knt3VtO9bpTIKHf6ibWHB7g#2017-01-11_Econ_113_S2017_Syllabus

• Announcements:https://bcourses.berkeley.edu/courses/1456905/announcements• Readings:PaulBoyer:AmericanHistory:AVeryShortIntroductionhttp://amzn.to/2gQw7QE.AlanTaylor:ColonialAmerica:AVeryShortIntroductionhttp://amzn.to/2hlru41.DavidA.Gerber:AmericanImmigration:AVeryShortIntroductionhttp://amzn.to/2gskihT.WalterNugent:Progressivism:AVeryShortIntroductionhttp://amzn.to/2gwhchF.EricRauchway:TheGreatDepressionandtheNewDeal:AVeryShortIntroductionhttp://amzn.to/2hvpCGf.DavidGarland:TheWelfareState:AVeryShortIntroductionhttp://amzn.to/2gDQMci.MarthaL.Olney:MicroeconomicsasaSecondLanguagehttp://amzn.to/2hvDCj8.Plusabout2articlesaweek…

Page 18: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

CatchOurBreath…• Comments? • Questions? • On to “deep

economic history”

Page 19: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

WhoAreYou?ToYouriClickers…:SomeQuestions

Whatyearareyou?A. FirstB. SecondC. ThirdD. FourthE. Fifth&up…

HasEcon1beenyouronlypreviouseconclass?A. YesB. NoC. MaybeD. What’sEcon1?

AreyouordoyouwanttobeaHistory/PEmajor?A. YesB. NoC. Maybe

AreyouordoyouwanttobeanEconmajor?A. YesB. NoC. MaybeD. What’sanEconmajor?

Page 20: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

ToYouriClickers…:SomeMathQuestionsSuppose some quantity is growing at a geometric rate of 3%/year. About how long will it take to grow by a factor of eight?A. 267 yearsB. None of the other answersC. 24 yearsD. 75 yearsE. There is not enough

information to give an answer

Suppose that we have a quantity x that follows the equation:dx(t)/dt = -(0.08)x(t) + 0.32What is the long-run steady-state asymptote to which x(t) will converge?A. None of the other answersB. 4C. 24D. 40E. There is not enough

information to give an answer

Page 21: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

ToYouriClickers…:AnotherMathQuestionSuppose that the daily demand for lattes by the 30,000 students of Euphoric State University in the town of Avicenna is given by:P = 10 - Q/12,000where P is the price of lattes in dollars and Q is the number of lattes consumed everyday by the students.Suppose further the supply of lattes is given by:P = 4that is, as many lattes are demanded will be produced and sold by cafes at a price of $4/latte. What is the equilibrium quantity of lattes?A. 7,500 lattes/dayB. 48,000 lattes/dayC. There is not enough informationD. None of the other answersE. 72,000 lattes/day

Page 22: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

ToYouriClickers…:MoralPhilosophyQuestionsMarx: Nineteenth-century thinker Karl Marx believed…A. that eventually growing pressures

for democracy would overthrow capitalism

B. that capitalism and democracy would smoothly advance together

C. that developing capitalism would eventually suppress democracy and cause a return to oligarchy

D. that bureaucratic centralism would eventually eliminate both democracy and capitalism

E. that the capitalist mode of production was the end state of history, and was compatible with either democracy or oligarchy

Keynes: Twentieth-century thinker John Maynard Keynes believed…A. social peace and expanding production

could be maintained by clever macroeconomic policy, requiring an active central bank and the somewhat comprehensive socialization of investment

B. a market capitalism that turned the stuff of people's lives--their communities, their occupations, and their incomes--into market playthings by making land, labor, and finance into "commodities" was playing with fire.

C. human beings were too violent to avoid large-scale destructive industrial wars for very long

D. ultimately capitalism was inconsistent with democracy, and capitalism would win

E. ultimately capitalism was inconsistent with democracy, and democracy would win

Page 23: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

ToYouriClickers…:HistoryQuestionsChina Stands Up: China's recovery from its long relative economic and political decline that began early in the Qing Dynasty began to gather strength with…A. the overthrow of the Qing by Yuan

Shikai 袁世凱 in 1911 B. the return to power of Deng

Xiaoping 邓⼩小平 in 1977C. the northern expedition of Chiang

Kaishek 蔣中正 in 1928D. the victory of Mao Zedong ⽑毛泽东 in

the Chinese Civil War in 1948E. the self-strengthening movement

led by Zeng Guofan 曾国藩 and Li Hongzhang 李鸿章 beginning in the 1860s

Neoliberalism: The neoliberal movement to place more emphasis on using market- and market-friendly institutions and to moderate the pursuit of socialist and social democratic ends gathered force in…A. the 1980s, with the elections of Ronald

Reagan in the U.S. and Margaret Thatcher in * the 1990s, with the election of Bill Clinton in the United States and Tony Blair in Britain, and the passage of NAFTA

B. the 1960s, with the election of Lyndon Johnson in the United States

C. the 1950s, with the election of Dwight Eisenhower in the United States

D. the 2000s, with the election of George W. Bush in the United States and China's joining the WTO

E. none of the other answers

Page 24: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

WhyIAsk…• I need to keep the class

as a whole balanced between bored and lost…

• Those of you who haven’t had much in the way of economics will have to work a little harder…

• Those of you who haven’t had much in the way of history and moral philosophy will have to work a little harder in different ways and places…

Page 25: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

WhyIAsk…II• I will need to spend

some time building tools:• Economic model and

quantitative assessment tools…

• Moral philosophical framework tools…

• Doing so will bore a bunch of you further…

• Not doing so will leave a bunch of you lost…

• I will try to strike the right balance…

Page 26: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

CatchOurBreath…• Comments? • Questions? • What’s up next?

• How this course is going to work…

Page 27: 2017-01-18 Econ 113 Slidesdelong.typepad.com/2017-01-18-econ-113-slides.pdfJan 18, 2017 · presentation are crippling themselves ... • Your intellectual background in studying economics

Assignment:LettertoLecturer

LettertoLecturer(1point)

BeforethemidnightendingthedayofFriday,January20,pleaseusebCoursestosendme—thelecturer—a200-to400-wordletterdescribing:

• Yourpersonalbackground(inasmuchdetailasyouwish,includingnone),

• Yourintellectualbackgroundinstudyingeconomicsandhistory,• Whyyouarespending1/32ofyourscarceBerkeleyacademictime

takingthiscourse,• WhatyouhopetogainforyourselfhereatBerkeley,• HowyouhopetousewhatyougainatBerkeleyinthefuture,and• Onethingyouhopetoknowattheendofthecoursethatyoudonot

knownow.