Economics

CONTENTS
PART 1 Introduction to ecaennics
1 What is economis
2 Thinking like an economar
PART 2 Supply and demand: How markets work 21
3. The merket forces of supeily and demand 31
Elasticity and its applications se
Background to dermand Consumer oncices 79
Background to supply, Firms in competitive
markets 112
PART 3 Markets, efficiency and wellare 145
7. Consumers, producers and the efficiency of
markets: 145
Supply, demand and government policies 163
PART 4 The economics of the public sector 575
3 The tax system 179
PART 5 Inefficient market allocations 197
18 Public goods, common resources and rew goods 107
11 Markat falum and extemalities 211
12 Information and behavioural ecofiomics 236
PART & Firm behaviour and market structures 251
12 Firma production decisions 251
18 Market structures I Monopoly 262
15 Market structures II. Manopolistic competition 287
16 Market structures III: Oligopoly 201
PART 7 Factor markets 325
17 The economics of factor markets 325
PART 8 Inequality 357
18 Income inequality and poverty 357
PART 5 Trade 379
1 Interdependence and the gene hom tro779
MACROECONOMICS PROLOGUE
PART 10 The date of macroeconomics 415
Messuing nation's well-being 415
21 Measuring the sost of iving 438
PART 11 The real economy in the long run 451
22 Production and growth 451
Unemployment: 475
PART 12 Interest rates, money and prices in the long run 400
24 Seving, investment and the francial system 4
25 The basic tools of finance 19
26 Issues in financial markets 533
27 The monetary system 500
28 Money growth and inflation 571
PART 13 The macroeconomics of open economies s01
28 Open-economy macroeconomics: Besc concepts 591
30 A macroeconomic theory of the open economy 606
PART 14 Short-run economic fluctuations et
21 Business cycles 621
32 Keynesian economics and IS-LM analysis 610
31 Aggregate demand and aggregate supply 664
34 The influence of monetary and fiscal policy on
aggregate demand 685 35 The short-run trade-off between inflation arid
unemployment 702
36 Supply-side policies 730
PART 15 International macroeconomics
37 Common currency areas and European Monetary Union 345
3 The Financial Crisis and sovereign debt 766
PART 1
INTRODUCTION TO ECONOMICS 1
1 What is economics?
The economy and economic systems
How people make decisions
How the economy at a whole warns
2 Thinking like a economists
rroduction is
The economist assets 17
The economistas policy advisal 20
Why economists disagree 24
Part 2
SUPPLY AND DEMAND: HOW MARKETS WORK 31
3 The market forces of supply and densanda
The assumptions of the market model 32
Demand 10
Shits versus movements along the demand
Sundly 30
Supply and demand together 42
Conclusion: How prices allocate resources 50
4 Elasticity and its applications so
The price slasticity of demand 56 Other demand slasticitias 64
Price wlasticity of supply 45
Applications of supply and demand elasticity 73
5 Background to demand Commer choices
The standard economo
The budget comamaine What the consumer ca
afford at Preferences: What the consumer wa
Optimization What the consumes chooses a
Summary: Do people real behave tha way? 104
Behavioural approaches to contr
behaviour 104
6 Background to supply: Firma in competitive markets
The posts of production 112
Production and costs 113 The various measures of cost HE
Costs in the short run and in the long run 122
Summary 123
Retums to scale 124
What is a competitive market) 127
Profit maximization and the competeve fermy
supply curve 129
The supply curve in a competitive market 100
Conclusion Behind the supply curve sab
PART 3
MARKETS, EFFICIENCY AND WELFARE 145
7 Consumers, producers and the efficiency of markets 148
Consumer surplus 146
Producer surplus 162
Market efficiency 155
8 Supply, demand and government policies 183
Controls on prices 163
Taxes 187
Subsides 173
Conclusion 124
Chingles, also known as Herpes Zoster
cows
PART 4
THE ECONOMICS OF THE PUBLIC SECTOR 179
9 The tax system
Taxes and efficiency i The deadweight loss of tanation 180
Administrative burden 100
The design of me tax system Taxes and equity Hit
Conclusion 102
PART 5
INEFFICIENT MARKET ALLOCATIONS 197
10 Public goods, common resources and merit goods)
The different kinds of goods 1
Public goods 100
Common resources 202
Merit goods 205
Conclusion 207
IT TRAN
PART 6
FIRM BEHAVIOUR AND MARKET STRUCTURES 251
13. Fums production decisions 351
Isoquent and costs The least coat input combination 250
Conclusion 25
14 Market structures 1. Monopoly 23
Imperfect competition 283
Why moncciones anse 203
How monopofies make production and posing
decisions 267 The welfare cost of monopoly 272
Price discrimination 275
Public policy towards monopoles 279
Conclusion: The prevalerice of monopoly 381
15 Market structures II: Monopolistic competition 207
Competition with differentiated products
Advertising and branding 292
Contestable markets 200
Conclusion 257
11 Market failure and externalities zn
16 Market structures III: Oligopoly
Characteristics of oligotioly 201
Game theory and the economics of
Entry barriers in oligopoly 316 cooperation 307
Market failure 211
Externalities 211 Externalities and market inefficiency 213
Private solutions to externalities 217 Public policies towards externalities 230
Public policy toward oligopolies 216
Publio/private policies towards externalities 223
Conclusion 315
Government tailore 227
Conclusion 232
PART 7
smart
12 Information and behavioural economics 235
Principal and agent 236
Asymmetric information 237
Deviations from the standard economic
model 243
Conclusion 246
FACTOR MARKETS 325
17 The economics of factar markets s
The marginal product theory of distribution 325
The demand for labour 326
The supply of labour 329
It's
ch
Egullitnum in the labourmet 320
Other theories of the above market
Mencat labour theory 23
Femiar economics and the hour marke
The waramics of discrimination 344
The other factors of production Land
and capital 347 Economic rent 360
Conchistas 251
PART 8
INEQUALITY 357
18 Income inequality and poverty
The measurement of inequality 18
The poitical philosophy of redistributing
Policies to reduce poмите это
Conclusion 373
PART 10
THE DATA OF MACROECONOMICS 415
20 Measuring a sation's well-being 415
The economy's income and getur The measurement of gross domestic
product 417
The components of GD 420
Real versus nominal 003
The imitations of GDP as a mesure
of well being 428 Irisemistional differences in GDP and the quality of life 430
Conclusion 4011
THA
21 Measuring the cost of living ass The Cansumer Prices Index 436
Conecting economic viables for the effects of inflabon 442
Conclusion 448
N
PART 9
TRADE 379
19 Interdependence and the gains from trade 3
The production ocasibilities font 379
International trade 384
The principle of comparse advantage The determinants of trade 291
The winners and losers from trade 300 Restrictions on trade a
Criticisms of comparative advantage theory 400
Conclusion 404
MACROECONOMICS
PROLOGUE 409
A world before markets 400
Classical economics 410 Marxist economics 411
The Austrian school 411
Kaynesaniem 412
Monetarism 412
Feminist economics 413
PART 11
THE REAL ECONOMY IN THE LONG RUN 451
22 Production and growth an Economic growth around the world 451
Growth theory 455
Productivity 456
The determinants of economic growth ale
Causes of growth 481
Endogenous growth theory 405
Economic growth and public policy see
Conclusion. The importance of long-run growth 421
23 Unemployment
Identifying unemployment 476
The causes of unemployment 479
The natural rate of unemployment 485 Marx and the reserve army of the
unemployed 491
The cost of unemployment 492
Conclusion 434
-Shingles, also known as Herpes Zoster
PART 12
INTEREST RATES, MONEY AND PRICES IN THE LONG RUN 499
24 Sering investment and the fancial
aystema
Financal pretutions the economy
Saving and invest
The meat for lond
Conduson 1
25 The basic tools of finance 19
Present value Measuring these velut
of money Managing nak 5
Asset velution 128
Condusion 539
26 Issues in financial markets s
The causes of the onse 533
The efficient markets hypothesis 541
Summary 543
27 The monetary system 553
The meaning of money 553
The role of central banks 559
The European Central Bank and the
Eurcevstem 500
The Bank of England 561
Banks and the money supply 561
The central bank's tools of monetary cormol 585
28 Money growth and inflation 571
What is inflation? 571
The classical theory of inflation 572
The costs of inflation sed Defiation ses
Conclusion tas
PART 13
THE MACROECONOMICS OF OPEN ECONOMIES 591
29 Open-economy macroeconomics: Basic concepts 591
The international flows of goods and capital 581
The prices for interriational transactions: Real and nominal exchange rates 596
PART 14
SHORT-RUN ECONOMIC FLUCTUATIONS 621
31 Business cycles
Trend growth r522
Causes of changes in the business ce
Business cyde nodes
Macroeconomic models of the economy
Condusion Os
32 Keynesian economics and IS-LM analysis s
The Keynesian cross 640
The multiplier effect 644
The IS and LM curves 600
General equilibrium using the IS-LM model 552
From IS-LM to aggregate demand 654
Conclusion 600
33 Aggregate demand and aggregate
supply 564
Three key facts about economic fluctuation
Explaining short-run economic fluctuations 588
The aggregate demand curve 867
The aggregate supply curve 9
Two causes of economic fluctuations 675
New Keynesian economics 679
Conclusion 680
34 The influence of monetary and fiscal policy on aggregate demand ess
How monetary policy influences aggregate demand 685
How fiscal policy influences aggregate
demand 632
logitech
CONTENTS
Uwing moley to stabilize the economy Conclusion
35 The short run trade-off between inflation and unemployment
The Phillipe curve 703
Shutte in the Philipe curve. The role of
expectatums 108 The long-nin vertical Philips curve as a
arpervert for central bank independence 712
Shifts in the Philips curve. The rote of suppily
shocks
The cost of reducing inflation 714
713
Inflation targeting 220 Reflecting on the Philips curve 724 A
36 Supply-side policies 730
Shifts in the aggregate supply curve 720 Types of supply-side policies 734
Conciueron 1
PART 15
INTERNATIONAL MACROECONOMICS 745
37 Common currency areas and European Monetary Union 245
The eure A The angle european market and the euro 246 The benefits and costs of a commen
The musty of optamen currency arвня 200 is Europe an optimum currency area? Tha
Fiscal policy and common currency wash
Conclusion 700Donly for t
38 The Financial Crisis and sovereign
debt 205
introduction 705
The sovereign debt crisis 772
Austerity policies too far too quickly? 777
Glossary 714
Index 794
Credits 1800
List of formules 002
PARETS
THE REAL