the first italian university to offer a degree in economics in 1902 … welcome to bocconi! … and...
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The first Italian University to offer a degree in Economics in 1902 …
Welcome to Bocconi!
… and one of the leading European Universities in Economics, Business, and Law today
What is economics about?
… but let’s start from the beginning
“An Inquiry into the Nature and Causes of the Wealth of Nations” (Adam Smith, 1776)
(with roots in moral philosophy)
Some Questions
Why are some countries richer than others?
Why have some countries become richer (poorer)?
Not only “wealth of nations” but also of social groups, organizations, individuals
Different levels
World
Countries
Organizations (e.g. Bocconi, Microsoft, the baker near your house)
Families, Individuals
Economics is about CONSTRAINTS:
The “Dismal” Science
You cannot spend more than what you earn (… or of what you can return after borrowing)
This is true of individuals, families, organizations, countries
Therefore, to spend more ultimately you have to produce more
Thus, economics is about how to produce more (and spend better)
The “Dismal” Science
At all the levels of individuals, families, organizations, countries, the World
Thus, preliminary answers
But why they produce more?
Some countries are richer because they produce more/better
Which is the richest country of the world today? (easy)
“Trivias”
And in 1850? (somewhat easy)
And in 1700? (more difficult)
And in 1500? (difficult)
USA 2001: $ 28,000
Italy 2001: $ 19,000
UK 1850: $ 2,300
NL 1700: $ 2,130
Italy 1500: $ 1,100
What are the annual incomes (per capita) of these countries?
Africa 2001: $ 1,500
Countries with per capita income > 20K USD in 2001
Countries with per capita income > 15K USD in 2001
Countries with per capita income > 10K USD in 2001
And in the Future?
Growth of income per capita in 16 countries: 500-2001
GDP Per CapitaIndex = 100 in year 500
100 100 122 155
2009
0
500
1000
1500
2000
2500
0 500 1000 1500 2000 2500
Year
Source: Angus Maddison, A Millennium Perspective
What do these countries have in common?
Trivia again
Political Democracy
Economic Democracy You can buy and sell many things at your
will, and can retain a good part of what you earn
A set of rules, norms, laws, which govern in a “clear and predictable way” the interactions amongst citizens
Political Democracy Role of the State and its institutions (e.g.
Central Bank), functioning of the economic system (Macroeconomics)
Economic Democracy Firms, consumers (Microeconomics,
Business/ Management Studies)
Rules Law (Commercial, Administrative, Criminal,
including history of how norms are formed and evolve)
The Big Subject Areas
Where it comes from and why is it relevant
1688 The Glorious Revolution
Division of labor (Adam Smith, once again)
Some more about economic democracy … and rules
But this has to be governed: Rules Role of the State
Law and institutions
Freedom of enterprise / markets Management (how to organize business)
Competition (Strategy)
Inventiveness
Multidisciplinarity Economics: Macro, micro, business studies
Law
Mathematics, statistics (the “tools” to understand)
Social Sciences: Sociology, economic history (b/c economics & business cannot do it alone)
Languages, computers (“tools” again)
Real applicability (from macro problems to everyday life)
Features of Economic & Business Studies
You have an important responsibility
Future is yours
All the Best!
Fulfill your own ambitions and goals in life but don’t forget the moral philosophy root
Economics (Business, Law) were made to understand how to make countries, firms, institutions, and ultimately the world betterThere is still a lot of work to do!