The Concise Encyclopedia of Economics
FEATURED TOPIC

Natural Resources

Sue Anne Batey Blackman and William J. Baumol

The earth's natural resources are finite, which means that if we use them continuously, we will eventually exhaust them. This basic observation is undeniable. But another way of looking at the issue is far more relevant to assessing people's well-being. Our exhaustible and unreproducible natural resources, if measured in terms of their prospective contribution to human welfare, can actually increase year after year, perhaps never coming anywhere near exhaustion. How can this be? The answer lies in the fact that the effective stocks of natural resources are continually expanded by the same technological developments that have fueled the extraordinary growth in living standards since the Industrial Revolution....

READ MORE
ALSO OF INTEREST

Entrepreneurship

Russell S. Sobel

Public Choice

William F. Shughart II

Immigration

George J. Borjas

Creative Destruction

W. Michael Cox and Richard Alm

Energy

Jerry Taylor and Peter Van Doren

Health Care

Michael A. Morrisey

Return to top
FEATURED BIOGRAPHY

Gustav Cassel

(1866-1945)

Gustav Cassel, a Swedish economist, developed the theory of exchange rates known as purchasing power parity in a series of post-World War I memoranda for the League of Nations. The basic concept can be made clear with an example. If US$4 buys one bushel of wheat in the United States, and if 120 Japanese yen exchange for US$1, then the price of a bushel of wheat in Japan should be 480 yen (4 x 120). In other words, there should be parity between the purchasing power of one U.S. dollar in the United States and the purchasing power of its exchange value in Japan....

READ MORE