Modern principles macroeconomics 3rd by cowen tabbarrok Modern principles macroeconomics 3rd by cowen tabbarrok Modern principles macroeconomics 3rd by cowen tabbarrok Modern principles macroeconomics 3rd by cowen tabbarrok Modern principles macroeconomics 3rd by cowen tabbarrok Modern principles macroeconomics 3rd by cowen tabbarrok
THIRD EDITION W Dear Student: Cowen • Tabarrok e love economics.We talk economics, argue economics, and think about economics every day.We use economics in our lives, not just when we choose whether to refinance a mortgage but also when we choose strategies for dating, keeping a good marriage, and parenting Yeah, we are weird But now a warning If you are afraid of being a little weird, Do Not Read This Book Once you have been exposed to the economic way of thinking, there is no going back—you will see the world differently and that will make you different Will what you learn be worth the price? That is for you to decide But we think economics is important We need economics to make better investments and better life choices Citizens in a democracy must evaluate issues of taxes, deficits, trade, health care policy, and inflation These issues and many more cannot be understood without an understanding of economics Do you want to vote ignorantly or intelligently? The economic way of thinking will help you to understand the issues of the day and to explain them with confidence to others We won’t lie: economics can be difficult Few things worth knowing come easily and, to understand economics well, you will need to master new tools and new ideas like supply and demand curves, marginal thinking, and equilibrium We have worked hard, however, to strip away as much jargon and unnecessary verbiage as possible We are going to give you what is important and not much else We are also going to have fun In addition, be sure to check out the new videos that can help you with the course content and enhance your fun MODERN PRINCIPLES: MACROECONOMICS Welcome to the world of economics LaunchPad makes preparing for class and studying for exams more effective Everything you need is right here in one convenient location—a complete interactive e-Book, all interactive study tools, and several ways to assess your understanding of concepts Alex Tabarrok This game-like quizzing system helps you focus your study time where it’s needed most Quizzes adapt to correct and incorrect answers and provide instant feedback and a learning path unique to your needs, including individualized follow-up quizzes that help build skills in areas that need more work OVER 90% LearningCurve is BENEFICIAL LaunchPad and LearningCurve Build Success! LaunchPad is even more efficient when used with LearningCurve In fact, students overwhelmingly recommend its use to their friends and peers Would you? Contact us at wortheconomics@macmillan.com to share your impressions… Integrated Online Resources New Work It Out online tutorials guide students through the process of applying economic analysis and math skills to solve the final problem in each chapter SCAN here for a sample Work It Out problem of students said LearningCurve’s tools and support helped them manage their study time and get better grades 95% LearningCurve is of students would recommend LearningCurve to another student APPROVED by students LearningCurve helped students Prepare better for class 95% Improve knowledge of course material MODERN PRINCIPLES: Tyler Cowen MACROECONOMICS LaunchPad logo suite Recommend LearningCurve to other students Earn better grades 25 50 75 100 Percentage of students Strongly agree Agree Somewhat agree New Videos Pioneers in teaching economics online, the authors have created a series of videos that are clever, to the point, and will help you better understand key economic concepts The video links are included in the book along with QR codes for mobile access THIRD EDITION http://qrs.ly/954d874 SCAN Here for a sample Video http://qrs.ly/p34ax6h @worthecon facebook.com/ModernPrinciples WORTH WORTH PUBLISHERS Tyler Cowen • Alex Tabarrok www.macmillanhighered.com Cover images: Earth: Jim Roof/myLoupe.com; Hands: © Oleh Barabash / Alamy this page left intentionally blank C O W E N • TAB ARROK MODERN PRINCIPLES: MACROECONOMICS, THIRD EDITION The compelling examples enhance the story and illuminate concepts means chapter opening example; means running example in the chapter CHAPTER OPENING RUNNING EXAMPLE Chapter 1: The Big Ideas Page CHAPTER OPENING : A small change in wording has a big effect on the incentives of captains transporting convicts to Australia Page 3: How can drugs be too safe? Chapter 2: The Power of Trade and Comparative Advantage Page 21: Economics is about cooperation, not just competition Chapter 3: Supply and Demand Page 29 CHAPTER OPENING and RUNNING EXAMPLE : Intuitive picture of the demand for oil and why it slopes downward Page 36: Intuitive picture of the supply of oil and why it slopes upward Chapter 4: Equilibrium: How Supply and Demand Determine Prices Page 47 CHAPTER OPENING and RUNNING EXAMPLE : What pushes and pulls prices toward their equilibrium values? Page 49: Why does a free market maximize consumer plus producer surplus? Chapter 5: Price Ceilings and Floors Page 67 CHAPTER OPENING and RUNNING EXAMPLE : Why did Nixon’s price controls lead to shortages and lines? Page 77: How rent controls work: and fail? Chapter 6: GDP and the Measurement of Progress Page 109: GDP does not count leisure Page 110: Why does GDP not count environmental costs? Chapter 7: The Wealth of Nations and Economic Growth Page 126: Economic growth: South Korea versus North Korea Page 132: Why landlocked countries have lower per capita GDP? Chapter 8: Growth, Capital Accumulation, and the Economics of Ideas (Solow Model) Page 146: Why bombing a country can raise its growth rate Page 159: How spillovers dampen the generation of new ideas? Chapter 9: Saving, Investment, and the Financial System Page 192: Why was leverage a chief cause of the financial crisis? Page 195: How did shadow banking contribute to the financial crisis? Chapter 10: Stock Markets and Personal Finance Page 218: Can speculative bubbles be identified? Chapter 11: Unemployment and Labor Force Participation Page 239: Percent job losses in post-1945 recessions Page 243: How did the pill help increase female labor force participation? Chapter 12: Inflation and the Quantity Theory of Money Page 249: Why did money growth lead to hyperinflation in Zimbabwe? Page 264: Why is inflation painful to stop? Chapter 13: Business Fluctuations: Aggregate Demand and Supply Page 280: Real shocks and the weather in India Page 292: Aggregate demand shocks and real shocks in the Great Depression Chapter 14: Transmission and Amplification Mechanisms Page 304: Labor adjustment costs Page 308: Collateral damage Chapter 15: The Federal Reserve System and Open Market Operations Page 325: The Fed, short run interest rates, and the Federal Funds rate Page 328: The Fed and systemic risk S E E T H E I N V I S I B L E H A N D C O M KEY: C O W E N • TAB ARROK MODERN PRINCIPLES: MACROECONOMICS, THIRD EDITION S E E T H E I N V I S I B L E H A N D C O M Chapter 16: Monetary Policy Chapter 19: International Trade Page 351: Can the Fed deal with asset price bubbles? Page 352: Rules versus discretion: What about a nominal GDP rule? Page 413: What is the cost of the sugar tariff? Page 418: How does trade affect child labor? Chapter 17: The Federal Budget: Taxes and Spending Page 376: Is government spending wasted? Page 380: Will the U.S government go bankrupt? Chapter 18: Fiscal Policy Page 401: Why did fiscal policy make matters worse in Argentina? Page 402: When is fiscal policy a good idea? Chapter 20: International Finance Page 428: Thinking about the U.S trade deficit and your trade deficit Chapter 21: Political Economy and Public Choice Page 455: How special interests such as U.S sugar growers push for favorable legislation? Page 462: Democracies and the mean voter theorem Page 465: Democracies and famine MODERN PRINCIPLES: MACROECONOMICS this page left intentionally blank MODERN PRINCIPLES: MACROECONOMICS Third Edition Tyler Cowen George Mason University Alex Tabarrok George Mason University Vice President, Editorial: Charles Linsmeier Vice President, Editing, Design, and Media Production: Catherine Woods Executive Editor: Carlise Stembridge Marketing Manager: Tom Digiano Consulting Editor: Paul Shensa Senior Developmental Editor: Bruce Kaplan Supplements and Media Editor: Lindsay Neff Art Director: Diana Blume Cover and Text Designer: Diana Blume Director of Editing, Design, and Media Production: Tracey Kuehn Managing Editor: Lisa Kinne Project Editor: Fred Dahl, TSIevolve Photo Editor: Robin Fadool Production Manager: Barbara Anne Seixas Supplements Production Manager: Stacey Alexander Supplements Project Editor: Edgar Doolan Composition: TSIevolve Printing and Binding: RR Donnelley Cover Image: © Oleh Barabash/Alamy and Jim Roof/myLoupe.com Library of Congress Preassigned Control Number: 2014952564 ISBN-13: 978-1-4292-7840-9 ISBN-10: 1-4292-7840-4 © 2015, 2013, 2010 by Worth Publishers All rights reserved Printed in the United States of America First printing Worth Publishers 41 Madison Avenue New York, NY 10010 www.worthpublishers.com Economics is the study of how to get the most out of life Tyler and Alex this page left intentionally blank ... theorem Page 465: Democracies and famine MODERN PRINCIPLES: MACROECONOMICS this page left intentionally blank MODERN PRINCIPLES: MACROECONOMICS Third Edition Tyler Cowen George Mason University Alex... from international trade Present Modern Models and Vivid Applications Modern is our third goal in writing Modern Principles We knew that to reflect modern macroeconomics, we had to cover the... Our second goal in writing Modern Principles: Macroeconomics is to show—again and again—that incentives matter In fact, incentives are the theme throughout Modern Principles, whether discussing