Explain the economic efficiency theory of tort liability and describe the reasoning behind this theory. Then, using the factory example in Section 5.3 of our digital book, show how the economic efficiency theory works to provide the factory owner with an incentive to avoid harm in the first place and therefore serves as a deterrent.
Explain the corrective justice theory of tort liability and describe the reasoning behind this theory. Then, using the factory example in Section 5.3 of our digital book, show how the corrective justice theory works to provide justice in the sense of “undoing the injury.”
Compare and contrast the economic efficiency and corrective justice theory by pointing to at least two key differences between the two approaches and point to the theory you find most persuasive, explaining your reasons why.
Did you describe in detail the economic efficiency theory of tort liability and relate it to the factory example?
Did you describe in detail the corrective justice theory of tort liability and relate it to the factory example?
Did you describe in detail at least two key differences between the economic efficiency theory and the corrective justice theory and explain which one you find most persuasive?
Did you cite your sources using in-text citations and match them up with references in APA format at the end of your paper?
uring periods of inflation, the real purchasing power of tax revenues decline. Constant expenditures lead to a larger budget deficit as a result of the reductions in the real value of revenues. This tendency of inflation to increase the real budget deficit is referred to as the Tanzi effect. During hyperinflation, however, the Tanzi effect reduces the real value of tax revenues. It’s deemed that so long as individuals remain confident in fiscal authorities and their ability to respond to inflation – via the means of increasing taxes or decreasing expenditures – they will hold money as a means of exchange and store of value. However, upon the emergence of the Tanzi effect, people’s confidence in the government’s ability to manage the deficit is disrupted, prompting them to reduce their holdings of real money balances (Niskanen Center 2018). It’s apparent that the Venezuelan government spending is significantly exceeding that which it is taking in and therefore putting them in a budget deficit. The government ceased releasing statistics with regards to the magnitude of the country’s budget deficit a few years ago. Nevertheless, reducing it is deemed a prime concern. However the CIA have estimated that the deficit is approximately 46% of the countries gross domestic product during the period of 2017 (Bloomberg 2019). One approach in hope of restoring Venezuela’s previously satisfactory economy, is for them to loan a significantly large amount of money – $60 billion over the period of three years – to them. Theoretically, this would enable the central bank to terminate the printing of Bolívar’s. This would, in theory, diminish the on going decrease of the Bolívar’s value – which has lost 99% of its value since 2013 (Bloomberg 2019). Similarly, replacing the national currency all together with a more stable currency – such as the US dollar – would be of benefit. Another commonly identified flaw that Venezuela is victim of, is their reliance upon a single and arguably unstable, commodity – being crude oil. As previously mentioned, the country would benefit immensely from expanding their number and range of export goods. Over the past decade, the difficulties associated with oil extraction and production have seemingly become more apparent. Not only this but the imposition of several sanctions on Venezuela’s oil industry, on behalf of the US, are significantly contributing to the industry’s downfall. The sanctions have meant that the US – one of Venezuela’s key oil associates – are blocked from doing business with Venezuela. They wer>GET ANSWER