Questions Documents

Document 1

1. What are the specificities of economic development for Schumpeter? Le développement économique arrive tout seul : c'est un processus endogène. Le monde, la social life peuvent créer des fluctuations du développement économique. Il a un caractère spontanée et discontinu.
2. When changes happen in the social life, does it affects every part of it? Sometimes, but not every time. It can be localized or global. Development is not complete every time.
3. What is innovation and who is at the origin of this phenomenon? New good, new method of production, new sector/market, new inputs
4. What is the influence of an innovation on the previous equilibrium? (You can make your own research to answer this question). Innovation tackles equilibirum, it's unstable & jerky.
5. How does Schumpeter defines the “entrepreneur”, and how is the concept different than the “capitalist” one? Donation which kind of skill. Origin of the "Destruction Créatrice".

Document 2

1. What is the critique that Ronald Coase addresses to economists in the introduction of his article? Ommit to check the foundations of toughs like:
   1. Libre échange/Sortie
   2. Transparence de l'information
   3. L'atomicité, grand nombre d'offreur et demandeurs
   4. Homogénéité des biens
   5. Parfaite mobilité des inputs
2. What are the two possibilities of agents when they want to make any kind of economical exchange?
3. What assumption of the “perfect competition” model is discussed by Ronal Coase here?
4. What is the response of agents regarding the absence of the effectiveness of this assumption? Looking for information → Justification to create a firm
5. What are the different costs that Coase is discussing? The cost of using the price mechanism, organising production, the costs of negotiating and concluding a separate contract → Transaction Costs
6. What is the “force” determining the size of the firm? The size make it complexe to organize & to manage. If too big not rentable
7. What is eventually the nature of the firm?

Document 3

1. What is the subject of the study of Alfred Chandler? The creation, implementation & function & invoation lead by or for the salaried manager (Manager en français)
2. What seems to have been his methodology?
3. When did the manager appeared and why? new railroadand telegraph companie, then Western Union, thanks to telegraphs & production enough modern to keep all of it on the same place.
4. How did his role evolved through time? More experience, more power, took place over the family/well knows in the hierarchy.
5. What are the three states of capitalism described by Chandler?
6. Why does this system initially developed in the US?
7. Analyse the title of the book: what does it refer to? And what does it mean?

Document 4

1. Business sector (SNF), consumers, government.
2. Goods produced by the SNF and consumed by the consumers.
3. Indirect securities, Government bonds.

Document 5

1. D'après leur modèle, (John Hicks), si le taux d’intérêt augmenter, alors c'est un signe que l'économie fonctionne car il y a beaucoup de demande de financement.
2. Dans ce système, selon Hicks, les politiques monétaires sont peu efficaces. Cela va augmenter la masse monétaire (type politique expansionniste), cela a pour risque de ne pas le faire bouger voir le faire baisser puis de créer une inflation à long terme car trappe à liquidités. Dans les politiques monétaires, ce qui est important, c'est la crédibilité de la banque centrale.
3. La crédibilité des banques
4. L'inflation menace les deux systèmes, elle crée de l'instabilité (premier choc pétrolier).
5. L'inflation crée de la pression qui crée une limite de temps.

Document 6

1. What are the principles of the agency theory?
   • An agency relationship is a contract between multiple peoples to perform some service on their behalf. But if both want to maximise profits, their goals will diverge.
2. What are agency costs? 1gency costs arise in any situation involving cooperative effor
   1. the monitoring expenditures by the principal,
   2. the bonding expenditures by the agent,
   3. the residual loss: divergence we saw earlier

3. What is the vision of the firm drawn by Jensen and Meckling?

4. How does the principal-agent relation can be applied in a public limited company?

5. Explain how the owners (the principals) make their choice regarding agency costs.