(Oxford) Diploma : Thinking Economics

Critical analysis of economic concepts, theories, and problems II The AI Economy and the Erosion of Critical Thinking

New topics introduced in 2026:

1. Trade balance (goods vs services)

2. Current account vs bilateral deficit narratives

3. Gains from trade and interdependence

4. Tariffs: incidence, pass-through, deadweight loss

5. Retaliation and trade war dynamics

6. Elasticity of demand/supply; substitution effects

7. Trade diversion and third-country substitution

8. Exchange rates and competitiveness

9. Inflation transmission from trade policy

10. Policy uncertainty and investment effects

11. Climate externalities and market failure

12. Physical climate risk vs transition risk

13. Climate risk pricing and risk premia

14. Cost of capital and sovereign borrowing spreads

15. Insurance market withdrawal / uninsurability

16. Risk pooling limits and correlated shocks

17. Regulation/standards as risk reduction

18. Adaptation investment and resilience finance

19. Energy market design (energy-only vs capacity)

20. Reliability as a system constraint

21. Capacity adequacy and reserve margins

22. Dispatchable generation and flexibility

23. Grid transmission/distribution bottlenecks

24. Storage economics and demand response

25. Peak demand, load growth, load duration curves

26. Option value of reliability resources

27. AI/data-centre electricity demand as a driver

28. General-purpose technologies (GPTs) and diffusion

29. Complementary investments (skills, data, processes)

30. Adoption S-curves and productivity lags

31. Measurement/realization of productivity gains

32. Capital deepening vs TFP growth

33. Automation vs augmentation (substitutes vs complements)

34. Skill-biased technological change

35. Job polarization and entry-level displacement

36. Bargaining power (labour vs capital)

37. Labour share vs capital share of income

38. Competition policy and rent concentration

39. “Jobless growth”

40. Social legitimacy (“social permission”) of technology

41. Welfare states, safety nets, and adjustment costs

42. Education and reskilling policy

43. Economic statecraft and coercive diplomacy

44. Credible threats, deterrence, commitment problems

45. Signalling, reputation, and strategic interaction

46. Sanctions/retaliation risk and market reactions

47. Structured finance and contract design

48. Sukuk structures and asset-backing

49. Risk allocation and cash-flow waterfalls

50. Information asymmetry, certification, and standards

51. Liquidity, investor base diversification

52. Agglomeration economies and clusters

53. FDI attraction and place-based industrial policy

54. Spillovers (knowledge, suppliers, networks)

55. Human capital pipelines and skill ecosystems

56. Infrastructure as a complement to investment

57. Institutions and political legitimacy

58. Collective action and protest dynamics

59. State capacity and enforcement costs

60. Credibility of reform and path dependence

61. Political economy of ideology vs material incentives

New lectures and Case Studies added. mid-Jan 2026

In an age where artificial intelligence promises unprecedented efficiency and assistance, the question arises: what becomes of humanity’s ability to think deeply, critically, and consciously? Across sectors—be it governance, education, labour, or technology—there is a growing tension between the allure of convenience and the imperative of maintaining human judgment. These case studies explore the philosophical and economic challenges posed by AI, emphasizing the need for conscious thought as the cornerstone of innovation, freedom, and progress.

Case Study Summaries

1. The Erosion of Critical Thinking in the AI Economy:
   Explores how AI’s automation of decision-making risks diminishing critical thought, urging policies that prioritize education and intellectual empowerment to sustain long-term economic growth.

2. The Paradox of AI Assistance and Human Autonomy:
   Examines the tension between AI’s efficiency and its potential to foster dependency, advocating for conscious policies that elevate human agency alongside technological progress.

3. Inequality and Power in an AI-Driven World:
   Highlights the risk of AI concentrating power in the hands of a few, stressing the need for deliberate thought and action to address systemic inequities and preserve democratic participation.

4. Education as the Battleground for Human Reason:
   Focuses on the role of education in cultivating critical thinking and ethical reasoning, urging reforms to ensure future generations think critically in a world dominated by AI.

5. Governance and the Balance of Ethics and Innovation:
   Explores policy solutions to ensure AI assists rather than replaces human reasoning, emphasizing the need for conscious thought in balancing innovation with ethical responsibility.

Welcome to Thinking Economics.

A summary as to what is include in terms of topics:

CONTENTS: THINKING ECONOMICS

• Philosophers and economics

• Ethics

• Valuation

• Automation

• Globalisation

• Climate change

• Nudges

• New Economic Thought

• Thought experiments

• Behavioural Economics

• Learning and Mind Maps

• Current economics

But within those broad categories there are many other topics:

• War and its impact on economies. Can a war ever be just? What is given up to go to war?

• The Allocation of Scarce Resources: Economic philosophers from Adam Smith to modern economists have pondered how to allocate these scarce resources efficiently. This issue encompasses questions of production (what to produce, how to produce) and distribution (for whom to produce).

• The Balance Between Equity and Efficiency: Philosophers have long debated the trade-off between equity (fairness) and efficiency (the optimal allocation of resources).

• The Role of Government in the Economy: The extent to which the government should be involved in the economy is a central question in economic philosophy. Views range from the laissez-faire approach, which advocates for minimal government intervention as espoused by Adam Smith, to the belief in a significant role for government in regulating markets, redistributing income, and providing public goods, as argued by economists like John Maynard Keynes.

• The Nature and Causes of Economic Growth: Understanding what drives economic growth and how to sustain it is a core concern.

This course is made up of:

• Lectures - including resources for further research - and questions to make you think

• Educational Announcements detailing updates

• Manual(s)

• The Q/A - this is where 'real' learning takes place as you can discuss the case studies and other homework