Economics

Cover
Brief Contents
Contents
About the Authors
Preface
Acknowledgements
Part 1: Introduction to Economics
	Chapter 1: What Is Economics?
		The Economy and Economic Systems
		How People Make Decisions
		How People Interact
		How the Economy as a Whole Works
		Summary
		Questions for Review
		Problems and Applications
	Chapter 2: Thinking Like an Economist
		Introduction
		Economic Methodology
		Schools of Thought
		The Economist as Policy Advisor
		Why Economists Disagree
		Summary
		Questions for Review
		Problems and Applications
Part 2: The Theory of Competitive Markets
	Chapter 3: The Market Forces of Supply and Demand
		The Assumptions of the Competitive Market Model
		Demand
		Shifts versus Movements along the Demand Curve
		Supply
		Supply and Demand Together
		Prices as Signals
		Analyzing Changes in Equilibrium
		Elasticity
		The Price Elasticity of Demand
		Other Demand Elasticities
		Price Elasticity of Supply
		Applications of Supply and Demand Elasticity
		Summary
		Questions for Review
		Problems and Applications
	Chapter 4: Background to Demand: Consumer Choices
		The Standard Economic Model
		The Budget Constraint: What the Consumer Can Afford
		Preferences: What the Consumer Wants
		Optimization: What the Consumer Chooses
		Conclusion: Do People Really Behave This Way?
		Behavioural Approaches to Consumer Behaviour
		Summary
		Questions for Review
		Problems and Applications
	Chapter 5: Background to Supply: Firms in Competitive Markets
		The Costs of Production
		Production and Costs
		The Various Measures of Cost
		Costs in the Short Run and in the Long Run
		Summary
		Returns to Scale
		What Is a Competitive Market?
		Profit Maximization and the Competitive Firm's Supply Curve
		The Supply Curve in a Competitive Market
		Conclusion: Behind the Supply Curve
		Summary
		Questions for Review
		Problems and Applications
	Chapter 6: Consumers, Producers and the Efficiency of Markets
		Consumer Surplus
		Producer Surplus
		Market Efficiency
		Summary
		Questions for Review
		Problems and Applications
Part 3: Interventions in Markets
	Chapter 7: Supply, Demand and Government Policies
		Controls on Prices
		Taxes
		Subsidies
		The Tax System
		The Deadweight Loss of Taxation
		Administrative Burden
		The Design of the Tax System
		Taxes and Equity
		Summary
		Questions for Review
		Problems and Applications
	Chapter 8: Public Goods, Common Resources and Merit Goods
		The Different Kinds of Goods
		Public Goods
		Common Resources
		Merit Goods
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
	Chapter 9: Market Failure and Externalities
		Market Failure
		Externalities
		Externalities and Market Inefficiency
		Private Solutions to Externalities
		Public Policies towards Externalities
		Public/Private Policies towards Externalities
		Government Failure
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
Part 4: Firm Behaviour and Market Structures
	Chapter 10: Firms' Production Decisions
		Isoquants and Isocosts
		The Least-Cost Input Combination
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
	Chapter 11: Market Structures I: Monopoly
		Imperfect Competition
		Why Monopolies Arise
		How Monopolies Make Production and Pricing Decisions
		The Welfare Cost of Monopoly
		Price Discrimination
		Public Policy towards Monopolies
		Conclusion: The Prevalence of Monopoly
		Summary
		Questions for Review
		Problems and Applications
	Chapter 12: Market Structures II: Monopolistic Competition
		Competition with Differentiated Products
		Advertising and Branding
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
	Chapter 13: Market Structures III: Oligopoly
		Characteristics of Oligopoly
		Game Theory and the Economics of Cooperation
		Entry Barriers in Oligopoly
		Public Policy towards Oligopolies
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
	Chapter 14: Market Structures IV: Contestable Markets
		The Nature of Contestable Markets
		The Limitations of Contestability
		Summary
		Summary
		Questions for Review
		Problems and Applications
Part 5: Factor Markets
	Chapter 15: The Economics of Factor Markets
		The Marginal Product Theory of Distribution
		The Demand for Labour
		The Supply of Labour
		Equilibrium in the Labour Market
		Other Theories of the Labour Market
		Marxist Labour Theory
		Feminist Economics and the Labour Market
		Monopsony
		Wage Differentials
		The Economics of Discrimination
		The Other Factors of Production: Land and Capital
		Economic Rent
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
Part 6: Inequality
	Chapter 16: Income Inequality and Poverty
		The Measurement of Inequality
		The Political Philosophy of Redistributing Income
		Policies to Reduce Poverty
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
Part 7: Trade
	Chapter 17: Interdependence and the Gains from Trade
		The Production Possibilities Frontier
		International trade
		The Principle of Comparative Advantage
		The Determinants of Trade
		The Winners and Losers from Trade
		Restrictions on Trade
		Criticisms of Comparative Advantage Theory
		Other Theories of International Trade
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
Part 8: Heterodox Economics
	Chapter 18: Information and Behavioural Economics
		Principal and Agent
		Asymmetric Information
		Behavioural Economics
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
	Chapter 19: Heterodox Theories in Economics
		Introduction
		Institutional Economics
		Feminist Economics
		Complexity Economics
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
Part 9: The Data of Macroeconomics
	Chapter 20: Measuring a Nation's Well-Being and the Price Level
		Marxist Economics
		The Austrian School
		Keynesianism
		Monetarism
		The Nature of Macroeconomics
		The Economy's Income and Expenditure
		The Measurement of Gross Domestic Product
		The Components of GDP
		Real versus Nominal GDP
		The Limitations of GDP as a Measure of Well-Being
		International Differences in GDP and the Quality of Life
		Measuring the Cost of Living
		The Consumer Prices Index
		Correcting Economic Variables for the Effects of Inflation
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
Part 10: The Real Economy in the Long Run
	Chapter 21: Production and Growth
		Economic Growth around the World
		Growth Theory
		Productivity
		The Determinants of Economic Growth
		Causes of Growth
		Endogenous Growth Theory
		Economic Growth and Public Policy
		Conclusion: The Importance of Long-Run Growth
		Summary
		Questions for Review
		Problems and Applications
	Chapter 22: Unemployment and the Labour Market
		Identifying Unemployment
		The Causes of Unemployment
		The Natural Rate of Unemployment
		Marx and the Reserve Army of the Unemployed
		The Cost of Unemployment
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
Part 11: Long-Run Macroeconomics
	Chapter 23: Saving, Investment and the Financial System
		Financial Institutions in the Economy
		Present Value: Measuring the Time Value of Money
		Managing Risk
		Asset Valuation
		Saving and Investment in the National Income Accounts
		The Market for Loanable Funds
		Summary
		Questions for Review
		Problems and Applications
	Chapter 24: The Monetary System
		The Meaning of Money
		The Role of Central Banks
		The European Central Bank and the Eurosystem
		The Bank of England
		Banks and the Money Supply
		The Central Bank's Tools of Monetary Control
		Money Growth and Inflation
		What Is Inflation?
		The Costs of Inflation
		Deflation
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
	Chapter 25: Open-Economy Macroeconomics
		The International Flows of Goods and Capital
		The Prices for International Transactions: Real and Nominal Exchange Rates
		A First Theory of Exchange Rate Determination: Purchasing Power Parity
		A Macroeconomic Theory of the Open Economy
		Supply and Demand for Loanable Funds and for Foreign Currency Exchange
		Equilibrium in the Open Economy
		How Policies and Events Affect an Open Economy
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
Part 12: Short-Run Economic Fluctuations
	Chapter 26: Business Cycles
		Trend Growth Rates
		Causes of Changes in the Business Cycle
		Business Cycle Models
		Macroeconomic Models of the Economy
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
	Chapter 27: Keynesian Economics and IS-LM Analysis
		The Keynesian Cross
		The Multiplier Effect
		The IS and LM Curves
		General Equilibrium Using the IS-LM Model
		From IS-LM to Aggregate Demand
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
	Chapter 28: Aggregate Demand and Aggregate Supply
		Three Key Facts about Economic Fluctuations
		Explaining Short-Run Economic Fluctuations
		The Aggregate Demand Curve
		The Aggregate Supply Curve
		Two Causes of Economic Fluctuations
		New Keynesian Economics
		Summary
		Questions for Review
		Problems and Applications
	Chapter 29: The Influence of Monetary and Fiscal Policy on Aggregate Demand
		How Monetary Policy Influences Aggregate Demand
		How Fiscal Policy Influences Aggregate Demand
		Using Policy to Stabilize the Economy
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
	Chapter 30: The Short-Run Trade-off between Inflation and Unemployment
		The Relationship between Inflation and Unemployment
		The Phillips Curve
		Shifts in the Phillips Curve: The Role of Expectations
		The Long-Run Vertical Phillips Curve as an Argument for Central Bank Independence
		Shifts in the Phillips Curve: The Role of Supply Shocks
		The Cost of Reducing Inflation
		Inflation Targeting
		Reflecting on the Phillips Curve
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
	Chapter 31: Supply-Side Policies
		Shifts in the Aggregate Supply Curve
		Types of Supply-Side Policies
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
Part 13: International Macroeconomics
	Chapter 32: The Causes and Aftermath of the Financial Crisis
		The Causes of the Crisis
		The Efficient Markets Hypothesis
		The Financial Crisis and Sovereign Debt
		The Sovereign Debt Crisis
		Austerity Policies: Too Far Too Quickly?
		The Productivity Puzzle
		Summary
		Questions for Review
		Problems and Applications
	Chapter 33: Common Currency Areas
		The Euro
		The Benefits and Costs of a Common Currency
		The Theory of Optimum Currency Areas
		Is Europe an Optimum Currency Area?
		Fiscal Policy and Common Currency Areas
		The Fiscal Compact
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
	Chapter 34: The Future of the European Union
		The Euro
		Italy
		Brexit
		Conclusion
		Summary
		Questions for Review
		Problems and Applications
Glossary
Index
Credits
List of Formulae