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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Dayuhan who wrote (60323)	12/7/2002 8:05:06 AM
From: Ilaine	Read Replies (1) \| Respond to of 281500

>>The “invisible hand” model does not assume the non-existence of government.<< Well, I was talking about formal economics, which requires mathmathical modelling. Which, of course, requires a lot of assumptions and oversimplifications. I just started reading the chapters of The Grabbing Hand which were not required for the Money and Banking class I took this spring. In the chapter I am reading now, they attempt to model the effect of absolutist monarchies vs. all other forms of government on the economies of various European countries and city-states circa 1000-1850. There appears to be a strong correlation between absolutist monarchies and shrinking of populations, presumably because the citizens leave and go somewhere else that has more lenient forms of government. Shrinking of population probably means decrease in GDP, but either they don't make that argument or we haven't got there yet. I think economists have a lot of fun with emerging economies because they get to test their theories in the real world, not just on paper.