Economics: A Beginner's Guide
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Almost everyone appreciates that economics is important. Promises are constantly made which relate to economic outcomes – 'no more boom and bust' was one from the last government – but rarely do things turn out as expected. Whether things go right or wrong, the consequences affect all of us. A proper understanding of the subject is essential to making our society successful.
Readers are introduced to the essential building blocks of economic thinking through the exploration of real world economic issues. Crucially, Forder goes beyond a basics presentation of what economists say, and asks what economics is, what it does, and when it is useful.
that nothing goes wrong. It is much less than perfect – the used-car example showed that, and there are plenty more cases to be considered in chapter 4. But whilst diminishing the importance of those things is a common fault of economists, allowing them to obscure the enormous power of the price mechanism is equally a mistake. The price mechanism brings coffee to our tables, and all that, and encourages the economization of scarce resources, and research and development of products or processes
seem to be thought important topics in the subject, plus a couple of others I think ought to be seen as responses to them. But I have also, of course, chosen issues that highlight ways of doing economics and so illustrate the frame of mind involved. Certainly there are plenty of important issues on which I make no comment at all, but there it is. The main lines are all well enough known to economists to be in the character of intellectual common property, so I have not littered the text with
possible. Are we supposed to compare the output under wholly different organizational schemes to determine the marginal product of that worker? Those may be easy ones. What, for example, is the increment to revenue consequent upon the work of the cleaners? What about the people who decide which pictures to hang on the wall in the head office? What is their marginal product? I think that an answer to that is that in some contexts, those are very real questions. If our focus were more on the
technological advances. So, for example, starting in the United States of 1900, by what year had there been as much technological advance as there was between 2000 and 2015? If we knew that the answer to that was, say, 1930 – so that technology advanced as much between 1900 and 1930 as it did between 2000 and 2015 – we could then start to compare the economic benefits of these equally sized advances of technology. But how do we measure technology so as to be able to do that? There is another way
banks’ ability to meet their immediate obligations beyond doubt. But the further hope is that the availability of this extra money will lead to more lending by the banks. It is ‘quantitative’ easing because, to the economist, what stands in opposition to ‘quantity’ is not ‘quality’, but ‘price’. Since monetary policy cannot be ‘eased’ by lowering the price of loans – the interest rate – it is made easier by changing the quantity of money. Again, though, the effect on economic activity is