Essential Economics pptx

[...]... replaced by rationing and illegal black markets or other corruption The growing recognition of the virtues of market economics lies behind a huge shift in economic policy around the world during the past couple of decades The role of traditional 001-085 5-12-2003 6 17:06 Pagina 6 ESSENTIAL ECONOMICS macroeconomic demand management policies has declined The new favourite policy is a “micro-macro” approach... 17:06 Pagina 10 ESSENTIAL ECONOMICS traits identified by experimental psychologists, which amount to a frontal assault on the whole idea that people, individually or as a group, mostly act rationally As yet, it is unclear if economic models can be developed using these traits that work at least as well as traditional models But it does seem possible that in the not too distant future economics will... generate the best price for the seller A 001-085 5-12-2003 24 A 17:06 Pagina 24 AUSTRIAN ECONOMICS depends on how many bidders take part and how well informed they are Unfortunately for the seller, this information is not always available before the auction takes place Austrian economics A brand of neo-classical economics established in Vienna during the late 19th century and the first half of the 20th... efficient than getting government planners to do it is one of the oldest in economics The decisions people take in the market drive an economy towards greater efficiency, thanks to the combination of at least three common human desires: for a bargain, to do better and to get richer When Adam Smith, the 18th-century “father of economics , said that the market economy works as if an “invisible hand” guides... economics , said that the market economy works as if an “invisible hand” guides the actions of individuals to combine for the common good, this is what he meant Market virtue Unlike macroeconomics, the core rules of market economics have been tested in thousands of different markets, in many different places, at many different times They do not work every time But mostly they hold true Take, for example,...001-085 5-12-2003 4 17:06 Pagina 4 ESSENTIAL ECONOMICS If things go wrong, or even if they go well, it will rarely be clear if a policy was right (or wrong) or merely lucky (or unlucky) True scientists, such as chemists, would find out by rerunning... beyond reasonable doubt But it is at 001-085 5-12-2003 17:06 Pagina 7 THE JOY OF ECONOMICS 7 least built on economic ideas tested, literally, in the marketplace Certainly, understanding better the relationship between macro and micro factors is likely to be the focus of much future economic thinking Will the influence of market economics continue to grow? It is not inevitable Demonstrations against globalisation,... shares, bonds, currencies, and so on be made to work more efficiently? In particular, what might be done to stop or better manage the consequences of financial 001-085 5-12-2003 8 17:06 Pagina 8 ESSENTIAL ECONOMICS bubbles? What are the circumstances in which government actions to deal with market failure go wrong? How best to reduce poverty will remain an important question for economists The goal... are wrong when they argue that economics only values economic growth (it does not) and is thus inherently anti-environmental But they are right to point out that, in practice, the statistic most often used to indicate whether economic welfare is rising or falling is a purely monetary measure, gdp, and that better measures of 001-085 5-12-2003 17:06 Pagina 9 THE JOY OF ECONOMICS 9 economic success or... than an iron law of economics Subsequent attempts to identify a “nonaccelerating inflation rate of unemployment” (nairu) have also produced disappointing results Macroeconomic advice should always come with a health warning Nowadays, it seems extraordinary that for much of the past century economists often regarded an economy as, in effect, 001-085 5-12-2003 17:06 Pagina 5 THE JOY OF ECONOMICS 5 a giant . Business Dictionary of Economics International Dictionary of Finance Essential Director Essential Finance Essential Internet Essential Investment Essential Negotiation Pocket. Economist and previous Economist guides to economics. vi ESSENTIAL ECONOMICS 001-085 5-12-2003 17:06 Pagina vi The joy of economics E conomics has come in for