第三讲：新自由主义

- Extreme neoliberalism

A. Hayek's extreme liberalism advocates. First, respecting market economy basing on individualism


Second, stress free competition with equal chances.


Innovative neo-liberalism-The rational expectations faction.

Lucas’ theoretical point : the public itself can take advantage of their limited information completly, prices and wages were flexible. This Government and the public can share the same information , they both have the same advantage. In a sense, the advantages of the public may be better than the Government . if the Government's policy is Unreasonable ,they can not deceive the public forever. As prices and wages were flexible, they believe that market mechanisms can solve the unemployment problem, so there is no need for the Government to interfere. Therefore, they come to the "ineffective government policies on the" point of view.



Innovative neo-liberalism- the basic ideas of public choice theory
A: studying the public choice theory of collective decision-making or political decision-making (economic policies) B:to explore the reasons for the deep economic problems, involving all aspects of the political process, including the constitutional, legislative, administrative justice

The basic ideas of neo-liberalism and the main factions

A) the main factions of neo-liberalism the extreme or radical neo-liberal (Hayek (哈耶克)neoliberalism, Friedman（弗里德曼） modern monetarism) moderate neo-liberal (Freiburg –弗莱堡faction), an innovative new freedom Doctrine (rational expectations school).
Third, advocating the world economy integration mode featuring as free trade

primary factions - Innovative neoliberalism

The rational expectations faction (Lucas).


primary factions - Moderate neoliberalism - Freiburg faction

. First, respecting "social market economy theory."

Second, encourage competition, being against the monopoly.

Third, the real cause - 1973 - 1975 economic crisis - the consequences of Keynesianism.
the revival of neo-liberalism (in the 20th century 70's)


Theoretical Origin of neo-liberalism ____classical economy liberalism (Adam Smith classical economy liberalism). First, the "natural order" theory of the importance of agriculture . Second, Adam Smith's "economy man" hypothesis

primary factions - The fundamental ideas of modern monetarism.

First, inflation is a monetary phenomenon, causing a sharp increase in money supply, rather than the rapid increase in production. the Government has decided to - or can decide - the quantity of money. Third, the only way to cure inflation,is to slow down monetary growth rate. Fourth, the development of inflation needs time - in terms of years rather than a monthly basis, to heal inflation also needs time Fifth, the side-effects of treating inflation is inevitable
Teaching points

First, the revival of neo-liberalism (in the 20th century 70's) 1. historical background 2. Theoretical origin

Second, the basic ideas of neo-liberalism and the main factions 1. Extreme neo-liberalism 2. Moderate neo-liberalism 3. Innovative neo-liberalism Third, the evaluation of neo-liberalism Rationality and limitations

教学要点
一、新自由主义的复兴（20世纪70年代） 1历史背景 2.理论渊源 二、新自由主义的基本主张与主要流派 1.极端的新自由主义 2.温和的新自由主义 3.创新的新自由主义 三、新自由主义的评价 合理性与局限性

the revival of neo-liberalism (in the 20th century 70's)
Innovative neo-liberalism- the basic ideas of public choice theory

1.The U.S. economy being in trouble due to the failure of the political system rather than the failure of the market system 2. in order to overcome the economic crisis ,we must abandone Keynesian political position to seek treatment from the liberal position recipe for the political system.

historical background First, the revival of the direct cause - failure of Keynesian (凯恩斯)practice. The emergence of government failure stagnation and high inflation. Second,Keynesian own shortcomings.

The key assumptions of rational expectations: People must use all available information to expectat as possible ,rather than the just past inflation if the forecast keep up with the forecast of economic theory ,that is rational expectations
Third, the being against the planned economy. (Program mode will lead to economic inefficiency, the political centralization, the truth of the end) Fourthly, Advocating monetary non-nationalization