Efnisyfirlit

• Cover Page
• Title
• Copyright
• About the Authors
• Contents
• Preface
• Student and Lecturer Resources
• Acknowledgements
• Part A INTRODUCTION
• 1 Economic issues
• 1.1 Global Economic Issues
• COVID-19 and the global health emergency
• Global inflation
• The environment and the global climate emergency
• 1.2 The Core of Economics
• The problem of scarcity
• Demand and supply
• 1.3 Dividing Up the Subject
• Microeconomics
• 1.1 The Opportunity Costs of Studying: What are you sacrificing?
• Macroeconomics
• 1.2 Business Cycles: The inherent volatility of economies
• 1.4 Modelling Economic Relationships
• The production possibility curve
• The circular flow of goods and incomes
• Models and data
• 1.3 Nominal and Real House Prices: Going through the roof
• 1.5 Economic Systems
• The command economy
• 1.4 Command Economies: Rise and fall of planning in Russia
• The free-market economy
• The price mechanism
• The mixed market economy
• Part B MICROECONOMICS
• 2 Markets, demand and supply
• 2.1 Demand
• The relationship between demand and price
• The demand curve
• Other determinants of demand
• Movements along and shifts in the demand curve
• 2.2 Supply
• Supply and price
• The supply curve
• Other determinants of supply
• Movements along and shifts in the supply curve
• 2.3 The Determination of Price
• Equilibrium price and output
• 2.1 UK House Prices: Unearthing the foundations of house price patterns
• 2.2 Stock Market Prices: Taking stock of share prices
• 2.3 Commodity Prices: Riding the commodities Big Dipper
• Movement to a new equilibrium
• 2.4 The Free-Market Economy
• Advantages of a free-market economy
• Problems with a free-market economy
• 3 Markets in action
• 3.1 Price Elasticity of Demand
• The price elasticity of demand
• Measuring the price elasticity of demand
• Interpreting the figure for elasticity
• Determinants of price elasticity of demand
• 3.1 The Measurement of Elasticity
• 3.2 Price Elasticity of Demand and Consumer Expenditure
• 3.3 Price Elasticity of Supply (PεS)
• 3.2 Advertising and its Effect on Demand Curves: How to increase sales and price
• The determinants of price elasticity of supply
• 3.4 Other Elasticities
• Income elasticity of demand
• Cross-price elasticity of demand
• 3.3 Elasticities and Relationships: Where there’s a relationship, there’s an elasticity
• 3.5 Markets and Adjustment over Time
• Short-run and long-run adjustment
• Price expectations and speculation
• 3.4 Short Selling: Gambling on a fall in share prices
• 3.6 Markets Where Prices are Controlled
• Setting a minimum (high) price
• Setting a maximum (low) price
• 3.5 A Minimum Unit Price for Alcohol: A way of reducing alcohol consumption
• 3.6 UK Payday Loan Cap: Capping the cost of short-term credit
• 3.7 The Effect of Imposing Taxes on Goods: Who ends up paying?
• 4 The demand decision
• 4.1 Consumer Choice
• Utility and the rational consumer
• 4.1 Satisfaction and Consumer Demand: Identifying the benefit drivers
• The rational consumer’s optimal combination of goods
• 4.2 Optimal Consumption Bundles: Equi-marginal principle in consumption
• 4.2 The Timing of Costs and Benefits
• Intertemporal choices
• Maximising utility with intertemporal choices
• 4.3 Uncertainty and Risk
• Choice under risk and uncertainty
• 4.3 Intertemporal Decision Making and the Rational Consumer: Incorporating impatience into models of consumer choice
• Attitudes towards risk
• Insurance: a way of removing risks
• 4.4 Futures Markets: A way of reducing uncertainty
• Choices under asymmetric information
• 4.5 Problems with Insurance Markets: Adverse selection and moral hazard
• 4.4 Behavioural Economics
• What is behavioural economics?
• Processing limited information
• Taking other people into account
• Biased behaviour
• Implications for economic policy
• 4.6 Nudging People: How to change behaviour without taking away choice
• 5 The supply decision
• 5.1 Production and Costs: Short Run
• Short-run and long-run changes in production
• Production in the short run: the law of diminishing returns
• Measuring costs of production
• 5.1 Diminishing Returns in the Bread Shop: Is the baker using his loaf?
• Costs and output
• 5.2 Malthus and the Dismal Science of Economics: Population growth + diminishing returns = starvation
• 5.3 The Relationship Between Averages and Marginals
• 5.4 Costs and the Economic Vulnerability of Firms: The behaviour of costs and firms’ financial well-being
• 5.2 Production and Costs: Long Run
• The scale of production
• Long-run average cost
• 5.5 The Optimum Combinations of Inputs: Equi-marginal principle in production
• The relationship between long-run and short-run average cost curves
• Long-run cost curves in practice
• Postscript: decision- making in different time periods
• 5.6 Minimum Efficient Scale: The extent of economies of scale in practice
• 5.3 Revenue
• Total, average and marginal revenue
• Average and marginal revenue curves when price is not affected by the firm’s output
• Average and marginal revenue curves when price varies with output
• Shifts in revenue curves
• 5.4 Profit Maximisation
• Some qualifications
• 5.5 Problems with Traditional Theory
• Explaining actual producer behaviour
• Alternative aims
• 6 Market structures
• 6.1 The Degree of Competition
• 6.2 Perfect Competition
• Assumptions
• The short-run equilibrium of the firm
• The short-run supply curve
• The long-run equilibrium of the firm
• 6.3 Monopoly
• What is a monopoly?
• Barriers to entry
• 6.1 E-Commerce: Has technology shifted market power?
• Equilibrium price and output
• Monopoly versus perfect competition: which best serves the public interest?
• Potential competition or potential monopoly? The theory of contestable markets
• 6.2 Breaking the Monopoly on live Premier League Football: The sky is the limit for the English Premier League
• 6.4 Monopolistic Competition
• Assumptions
• Equilibrium of the firm
• Non-price competition
• Monopolistic competition and the public interest
• 6.5 Oligopoly
• The two key features of oligopoly
• Competition and collusion
• Collusive oligopoly
• 6.3 OPEC: The history of the world’s most famous cartel
• Non-collusive oligopoly: the breakdown of collusion
• Non-collusive oligopoly: assumptions about rivals’ behaviour
• Oligopoly and the consumer
• 6.4 Buying Power: What’s being served up by the UK grocery sector?
• 6.6 Game Theory
• Simultaneous single-move games
• Repeated simultaneous-move games
• Sequential-move games
• 6.5 The Prisoners’ Dilemma: Choosing whether to deny or confess
• 6.7 Price Discrimination
• Advantages to the firm
• Price discrimination and the public interest
• 6.6 Profit-Maximising Prices and Output For a Third-Degree Price Discriminating Firm: Identifying different prices in different markets
• 7 Wages and the distribution of income
• 7.1 Wage Determination in a Perfect Market
• Perfect labour markets
• The supply of labour
• 7.1 Labour Market Trends: Patterns in employment
• The demand for labour: the marginal productivity theory
• Wages and profits under perfect competition
• 7.2 Wage Determination in Imperfect Markets
• Firms with power
• The role of trade unions
• Bilateral monopoly
• 7.2 Wages under Bilateral Monopoly: All to play for?
• The efficiency wage hypothesis
• 7.3 Inequality
• Types of inequality
• Measuring the size distribution of income
• The functional distribution of income
• 7.3 The Gender Pay Gap: Wage inequalities between men and women
• The distribution of wealth
• Causes of inequality
• 7.4 Minimum Wage Legislation: A way of helping the poor?
• 7.5 Inequality and Economic Growth: Macroeconomic implications of income inequality
• 7.4 The Redistribution of Income
• Taxation
• Benefits
• 7.6 Uk Tax Credits: An escape from the poverty trap?
• The tax/benefit system and the problem of disincentives: the ‘poverty trap’
• 8 Market failures and government policy
• 8.1 Social Efficiency
• 8.2 Market Failures: Externalities and Public Goods
• Externalities
• Public goods
• 8.1 The Tragedy of the Commons: The depletion of common resources
• 8.3 Market Failures: Monopoly Power
• Deadweight loss under monopoly
• Conclusions
• 8.4 Other Market Failures
• Imperfect information
• Immobility of factors and time lags in response
• Protecting people’s interests
• 8.2 Should Health-Care Provision be Left to the Market?: A case of multiple market failures
• Other objectives
• How far can economists go in advising governments?
• 8.5 Government Intervention: Taxes and Subsidies
• The use of taxes and subsidies
• Assessing the use of taxes and subsidies
• 8.6 Government Intervention: Laws and Regulation
• Laws prohibiting or regulating undesirable structures or behaviour
• Regulatory bodies
• 8.7 Other Forms of Government Intervention
• Changes in property rights
• Provision of information
• The direct provision of goods and services
• Nationalisation and privatisation
• 8.8 More or Less Intervention?
• Drawbacks of government intervention
• Advantages of the free market
• Should there be more or less intervention in the market?
• 8.9 The Environment: A Case Study in Market Failure
• The environmental problem
• Market failures
• Policy alternatives
• 8.3 Green Taxes: Are they the answer to the problem of pollution?
• 8.4 Trading our Way out of Climate Change: The EU carbon trading system
• 8.5 The Problem of Urban Traffic Congestion: Does Singapore have the answer?
• How much can we rely on governments?
• Part C MACROECONOMICS
• 9 Aggregate demand and the business cycle
• 9.1 Introduction to Macroeconomics
• Key macroeconomic issues
• Government macroeconomic policy
• 9.2 Economic Volatility and the Business Cycle
• The hypothetical business cycle
• The business cycle in practice
• Spending, output and the business cycle
• 9.1 Output Gaps and the Business Cycle: An alternative measure of excess or deficient demand
• 9.3 The Circular Flow of Income Model
• The inner flow, withdrawals and injections
• The relationship between withdrawals and injections
• Equilibrium in the circular flow
• 9.4 Simple Keynesian Model of National Income Determination
• Showing equilibrium with a Keynesian diagram
• The withdrawals and injections approach
• The income and expenditure approach
• 9.2 The Consumption Function: The relationship between consumption and income
• 9.5 The Multiplier
• The withdrawals and injections approach
• The income and expenditure approach
• The multiplier: a numerical illustration
• The multiplier and the full-employment level of national income
• 9.6 The Volatility of Private-Sector Spending
• Consumption cycles
• Instability of investment
• The role of the financial sector
• 9.3 Confidence and Spending: Does confidence help to forecast spending?
• Why do booms and recessions come to an end? What determines the turning points?
• 9.7 Appendix Measuring National Income and Output
• The product method
• The income method
• The expenditure method
• From GDP to national income
• Households’ disposable income
• Taking account of inflation
• 9.4 Making Sense of Nominal and Real GDP: The interesting case of nominal and real Japanese GDP
• 10 Aggregate supply and economic growth
• 10.1 The AD/AS Model
• The aggregate demand curve
• The aggregate supply curve
• Equilibrium
• 10.1 Short-run Aggregate Supply: The importance of micro foundations
• 10.2 Alternative Perspectives on Aggregate Supply
• The short-run aggregate supply curve
• The long-run aggregate supply curve
• Areas of general agreement
• 10.3 Introduction to Long-Term Economic Growth
• Long-run growth and the AD/AS model
• Comparing the growth performance of different countries
• The causes of economic growth
• 10.4 Economic Growth without Technological Progress
• Capital accumulation and capital deepening
• 10.2 Measuring Labour Productivity: Mind the UK productivity gap
• 10.3 Getting Intensive with Physical Capital: Capital intensity and labour productivity
• A simple model of growth
• The neoclassical growth model
• 10.5 Economic Growth with Technological Progress
• Technological progress and the neoclassical model
• Endogenous growth theory
• 10.4 UK Human Capital: Estimating the capabilities of the labour force
• 11 The financial system, money and interest rates
• 11.1 The Meaning and Functions of Money
• The functions of money
• What should count as money?
• 11.2 The Financial System
• The banking system
• 11.1 Financial Intermediation: What is it that banks do?
• Deposit taking and lending
• 11.2 The Growth of Banks’ Balance Sheets: The rise of wholesale funding
• Profitability, liquidity and capital adequacy
• Strengthening international regulation of capital adequacy and liquidity
• 11.3 The Rise of Securitisation: Spreading the risk or promoting a crisis?
• The central bank
• The role of the money markets
• 11.3 The Supply of Money
• The creation of credit
• The creation of credit: the real world
• What causes money supply to rise?
• The flow of funds equation
• Credit cycles
• The relationship between money supply and the rate of interest
• 11.4 Minsky’s Financial Instability Hypothesis: Are credit cycles inevitable?
• 11.4 The Demand for Money
• What determines the size of the demand for money?
• 11.5 Equilibrium
• Equilibrium in the money market
• The link between the money and goods markets
• 11.6 Money Supply, Aggregate Demand and Inflation
• The equation of exchange
• Money and aggregate demand
• 12 Output, unemployment and inflation
• 12.1 Unemployment
• Measuring unemployment
• Unemployment trends
• 12.1 The Costs of Unemployment: Is it just the unemployed who suffer?
• Unemployment and the labour market
• Types of disequilibrium unemployment
• 12.2 The Duration of Unemployment: Taking a dip in the unemployment pool
• Types of equilibrium unemployment (or natural unemployment)
• Long-term changes in unemployment
• 12.2 Inflation
• Introduction to the causes of inflation
• 12.3 Inflation and Living Standards: The return of inflation
• 12.4 Cost-push Inflation: Cost-push inflation and supply shocks
• 12.3 The Relationship Between Output, Unemployment and Inflation: The Short Run
• The AD/AS model
• The Phillips curve
• 12.5 Mind the Gap: Do output gaps explain inflation?
• 12.4 The Relationship Between Inflation and Unemployment: Introducing Expectations
• The expectations-augmented Phillips curve
• Natural rate hypothesis
• The accelerationist hypothesis
• New classical perspective
• 12.6 The Accelerationist Hypothesis: The race to outpace inflationary expectations
• Keynesian views
• 12.5 Inflation Rate Targeting
• 13 Macroeconomic policy
• 13.1 Fiscal Policy and the Public Finances
• Roles for fiscal policy
• Public-sector finances
• Sustainability of public finances
• The business cycle and the public finances
• The fiscal stance
• 13.2 The Use of Fiscal Policy
• 13.1 Primary Surpluses and Sustainable Public Finances: The fiscal arithmetic of government debt
• 13.2 The Fiscal Impulse: Assessing a country’s fiscal stance
• The effectiveness of fiscal policy
• Problems of magnitude
• The problem of timing
• Fiscal rules
• 13.3 The Evolution of the Stability and Growth Pact in the EU: A supranational fiscal framework
• 13.3 Monetary Policy
• The policy setting
• Control of the money supply over the medium and long term
• Short-term monetary measures
• Techniques to control the money supply
• Techniques to control interest rates
• 13.4 The Operation of Monetary Policy in the UK: Managing the reserves
• 13.5 Monetary Policy in the Eurozone: The role of the ECB
• 13.6 Quantitative Easing: Rethinking monetary policy in hard times
• Using monetary policy
• 13.4 Demand-Side Policy
• Attitudes towards demand management
• The case for rules and policy frameworks
• The case for discretion
• Central banks and a Taylor rule
• Conclusions
• 13.5 Supply-Side Policy
• Market-orientated supply-side policies
• Interventionist supply-side policies
• The link between demand-side and supply-side policies
• 13.7 Public Funding of Apprenticeships: Reforms to apprenticeships in England
• Part D INTERNATIONAL ECONOMICS
• 14 Globalisation and international trade
• 14.1 Global Interdependence
• Interdependence through trade
• 14.1 Trade Imbalance in the USA and China: An illustration of economic and financial interdependencies
• Financial interdependence
• International business cycles
• Global policy response
• 14.2 The Advantages of Trade
• Trading patterns
• 14.2 Trading Places: Partners in trade
• Specialisation as the basis for trade
• The law of comparative advantage
• The gains from trade based on comparative advantage
• Other reasons for gains from trade
• The terms of trade
• 14.3 Arguments for Restricting Trade
• Arguments in favour of restricting trade
• 14.3 Do we Exploit Foreign Workers by Buying Cheap Foreign Imports?
• Problems with protection
• 14.4 The World Trading System and the WTO
• 14.4 The Doha Development Agenda: A new direction for the WTO?
• 14.5 Trading Blocs
• Types of preferential trading arrangement
• The direct effects of a customs union: trade creation and trade diversion
• Longer-term effects of a customs union
• Preferential trading in practice
• 14.6 The European Union
• From customs union to common market
• 14.5 Features of The Single Market
• The benefits and costs of the single market
• Completing the internal market
• The effect of the new member states
• 14.7 The UK and Brexit
• Alternative trading arrangements
• Long-term growth, trade and Brexit
• 14.8 Trade and Developing Countries
• The relationship between trade and development
• Trade strategies
• Approach 1: Exporting primaries – exploiting comparative advantage
• Approach 2: Import-substituting industrialisation (ISI)
• Approach 3: Exporting manufactures – a possible way forward?
• 14.6 The Evolving Comparative Advantage of China: Riding the dragon
• 15 Balance of payments and exchange rates
• 15.1 The Balance of Payments Account
• The current account
• The capital account
• The financial account
• 15.2 Exchange Rates
• 15.1 Nominal and Real Exchange Rates: Searching for a real advantage
• Determination of the rate of exchange in a free market
• 15.3 Exchange Rates and the Balance of Payments
• Exchange rates and the balance of payments: no government or central bank intervention
• 15.2 Dealing in Foreign Currencies: A daily juggling act
• Exchange rates and the balance of payments: with government or central bank intervention
• 15.4 Fixed Versus Floating Exchange Rates
• Advantages of fixed exchange rates
• Disadvantages of fixed exchange rates
• Advantages of a free-floating exchange rate
• 15.3 The Importance of International Financial Movements: How a current account deficit can coincide with an appreciating exchange rate
• Disadvantages of a free-floating exchange rate
• Exchange rates in practice
• 15.4 The Euro/Dollar See-Saw: Ups and downs in the currency market
• 15.5 The Origins of the Euro
• The ERM
• The Maastricht Treaty and the road to the single currency
• 15.6 Economic and Monetary Union (EMU) in Europe
• Birth of the euro
• Advantages of the single currency
• Opposition to EMU
• 15.5 Optimal Currency Areas: When it pays to pay in the same currency
• Future of the euro
• 15.7 Debt and Developing Countries
• The oil shocks of the 1970s
• Dealing with the debt
• Websites appendix
• Key ideas and glossary
• Index