Class Lecture #18 - 10/14

1.) Markets are often "wrong"...... [1] lack of markets leads to externalitites
        - Market power
        - Information problems (cancer/individual health/insurance companies example)

2.) Markets are often "wrong"...... [2] Institutions matter
        - institution - any arrangement for people to live side by side
        - Rule of Law --> apply equally to everyone, not arbitrary, general law
        - get institutions right means you boost economic growth substantially

3.) Inflation..... when you have too much money going after the same amount of products, prices rise
        - since 1940, average prices have gone up by 16x