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A
activity analysis,
552
Adenauer, Konrad,
218
adverse selection,
282
advertising,
1–4;
as barrier to entry,
2–3;
competing with,
74;
deceptive,
2;
economic function,
1–2, 269;
expenditures,
1;
government,
3;
history,
1;
image,
2;
price,
3;
of quality,
82;
ratios to sales,
1;
regulation of,
3;
relationship to profit,
3;
seen as brainwashing,
59;
television,
303–4;
on Web sites,
303–4
Africa:
average incomes,
146;
economic freedom,
125;
foreign aid,
194;
government corruption,
99, 122, 194.
See also individual countries
African Americans:
civil rights movement,
119;
effects of New Deal policies,
233, 572–73;
poverty rates,
406;
segregation,
118, 119, 572;
strikebreakers,
321;
wages,
117, 543
African National Congress Party,
18
Afrikaners,
15
Aftalion, Albert,
305
Agent Orange,
327–28
aggregate demand:
externalities,
379;
fiscal policy influences,
183, 184, 185, 355, 483, 557;
fluctuations and business cycles,
49;
influences on,
316;
Keynesian view,
376, 483, 550
agricultural subsidy programs,
4–6;
costs,
4, 438;
criticism of,
4, 427;
economic impact,
5, 166, 580;
in European Union,
5, 166;
forms,
4, 5;
impact on international trade,
5–6;
impact on prices,
166, 437;
in OECD countries,
4–5, 427;
parity prices,
344;
reductions,
6;
supporters,
4, 429, 438–39;
in United States,
4, 5, 344, 437, 438–39;
wool,
398
agriculture:
cartels,
63;
commodity futures,
207, 208, 209;
in developing countries,
6, 557, 585–86;
diminishing marginal returns,
599;
effects of global warming,
220;
employment,
102–3;
in European Union,
5, 166;
international trade,
5–6, 427;
land rents,
580;
New Deal programs,
4, 173, 232–33, 572–73;
productivity growth,
102–3, 403;
share of labor force,
403, 417–18;
in Soviet Union,
66, 423;
tenant farmers,
233;
trade barriers,
5, 342, 427
Air Force, U.S.,
110
Airline Deregulation Act of 1978,
6
airline industry:
cartel,
74;
competition,
7;
deregulation,
6–10, 60, 440;
freight transportation,
487;
growth,
7;
hub-and-spoke system,
7, 8;
low-cost carriers,
7, 8;
mergers,
8;
national ownership rules,
10;
“Open Skies” agreements,
9–10;
political control of grid,
8–9;
profitability,
8;
regulation,
6, 7–8, 9–10;
subsidies,
10;
yield management,
601
air pollution:
controls,
170, 210, 399–400, 401–2, 441;
effects of fuel efficiency standards,
153;
futures,
210.
See also environmental damage
air traffic control,
9
Air Transportation Stabilization Board (ATSB),
10
Akerlof, George A.,
521
Allais, Maurice,
523
altruism:
actions based in,
34–35, 64;
environmental quality and,
163;
moral value,
162;
among voters,
398.
See also charity
American Stock Exchange (Amex),
479
American Trucking Association,
486
Anchorage earthquake,
114
Angola, civil war,
455
antidumping duties,
426–27
antitrust,
11–14;
criticism of,
11–13, 365;
effects,
8, 13–14;
enforcement,
12, 13–14, 62–63, 260, 366, 587, 594;
exemptions,
13, 474;
issues in sports,
474, 475;
laws,
11, 13, 14, 58, 259;
merger reviews,
260;
origins,
11, 59;
practices outlawed,
11;
suspension of enforcement during Great Depression,
234.
See also mergers; monopolies
apartheid,
14–19;
colour bar,
15–17;
created by white workers,
15, 16–17, 116;
decline,
17–18;
effects of international sanctions,
18, 452;
implementation,
17;
origins,
15–17
arbitrage:
costs,
268;
covered interest,
199;
in foreign exchange,
528;
locational,
469–70;
price differences eliminated by,
268;
in sports,
472
Arca/EX,
335
ARCH (autoregressive conditional heteroskedasticity),
530–31
Army, U.S.,
110
Army Corps of Engineers,
487
arts,
19–21;
donations to nonprofit organizations,
19, 64;
economic principles and,
19–21;
innovations,
21;
international trade in,
20;
subsidies,
20
asset prices:
based on present value of future cash flows,
138, 478;
relationship to replacement costs,
598.
See also efficient markets theory; stock prices
asymmetric information:
incentives under,
568, 600;
in insurance market,
596;
in markets,
88, 96, 268, 282, 521, 596–97;
about stock values,
88, 96;
on worker productivity,
594
AT&T,
366
ATSB (Air Transportation Stabilization Board),
10
auctions,
21–23;
of airport landing and takeoff rights,
168–69;
definition,
21;
Dutch,
21, 22, 168, 593;
economic experiments,
168, 592–93;
English,
21, 22, 168, 592–93;
sealed-bid,
21–22, 592–93, 601;
types,
21–22, 592–93, 601;
Vickrey (second-price),
21–22, 601;
of wireless bandwidth,
22–23
auditors, regulation of,
91
Audubon Society,
204
Austrian School of Economics,
23–27;
business cycle theory,
26, 569;
contemporary economists,
24;
history,
23–24;
leading figures,
23, 24, 526–27, 565, 569;
propositions,
24–27;
view of information and markets,
269.
See also Hayek, Friedrich August; marginalism; Mises, Ludwig von
automatic stabilizers,
184
automobiles:
accident rates,
327;
electric,
150;
emissions standards,
400;
fuel efficiency,
153, 374;
insurance,
281, 283;
Japanese industry,
309, 426;
safety regulation,
440;
voluntary export restrictions,
426;
warranties,
521
autoregressive conditional heteroskedasticity (ARCH),
530–31
B
Bachelier, Louis,
138
balance-of-payments accounts,
27–29;
capital account,
28–29, 290–91, 293, 297;
current account,
28, 29, 290–91, 292–93, 297;
deficits,
27;
definitions,
27–28;
discrepancies,
291, 292;
money supply and,
547, 571;
offsetting balances,
291;
surpluses,
27;
trade balance,
27, 28, 183, 297, 340;
of United States,
27, 28, 29, 292
Bangladesh, effects of corruption,
98
Banking Act of 1935,
176
Bank of England:
anti-inflation policies,
318;
bullion controversy,
580;
founding,
179;
operation of gold standard,
223
bank runs,
29–31;
in Great Depression,
232;
illiquidity,
180;
relationship to bank failures,
30;
spillover effects,
29–30;
as warning sign,
180
bankruptcy,
31–34;
corporate,
31, 32–33, 181;
costs,
33, 87, 89;
enforcement of laws,
89;
filing rates,
31, 32, 33;
government,
185–86;
history,
31;
law,
31–33;
pension plans and,
181;
personal,
31, 32, 33
banks:
antidiscrimination laws,
181;
capital requirements,
179, 440, 531;
checkable deposits,
71, 355, 356–57, 360, 361;
crises in Great Depression,
175–76, 180, 232;
currency issued by,
71;
failures,
30, 180, 232, 310;
free banking systems,
71–73;
international,
181;
national,
174;
regulation,
174, 178–82, 440, 460;
reserve requirements,
176, 177, 233, 351, 355, 357, 361;
reserves,
356–57;
runs on,
29–31, 180, 232;
state charters,
174;
too-big-to-fail,
180–81.
See also financial institutions; investment banks
Bank Secrecy Act,
181–82
barriers to trade.
See trade barriers
basketball,
472
BCA.
See benefit-cost analysis
Beane, Billy,
473
Bear Stearns and Company,
314
behavioral economics,
34–38;
bounded rationality,
34, 35, 590;
bounded selfishness,
34–35;
decision making,
547–48;
differences from traditional economic view of human behavior,
34–35;
finance,
35–36, 140;
loss aversion,
34, 548;
mental accounting,
34;
saving behavior,
36–37
benefit-cost analysis (BCA),
38–40;
of environmental policies,
38–39, 441–42;
estimation of benefits and costs,
38–39;
issues,
39;
use by governments,
39–40;
value framework,
161
Bentham, Jeremy,
525–26
Bernanke, Ben,
266
beta,
589
Bewley, Truman,
434
Black, Duncan,
428
black markets,
410
block booking of movies,
594
Blue Cross,
241
Blue Shield,
241
boards of directors.
See directors
Boers,
15
Boesky, Ivan,
315
Bolivia, dollarization,
253
Bond Market Association,
86
bonds,
40–42;
definition,
40;
government,
224–27;
interest payments,
289–90;
issuers,
40;
market values,
225;
municipal,
42, 224;
prices,
40, 289;
ratings,
41, 313.
See also corporate bonds; debt; government debt
booms.
See expansions
Boserup, Ester,
404
Boulware, Lemuel,
319
Boulwarism,
319
brand names,
42–44;
advertising,
1–2;
economic function,
43–44;
price premium,
42–43, 44;
quality assurance function,
2, 43–44, 81
Bridgestone,
43–44
brinkmanship strategy,
213
Britain.
See United Kingdom
Brock, William A.,
434
Brunner, Karl,
350
bubbles,
44–47;
debate on,
47;
definition,
45;
Internet stocks,
44–45, 140, 141, 301;
irrational,
45, 47;
Mississippi,
46–47;
perpetuation,
45;
rational,
45, 47;
South Sea,
46–47;
speculative,
198;
tulip,
45–46
budget deficits:
definition,
224;
of European Union members,
186;
fiscal policies,
182–83, 226–27, 355, 557;
future taxes implied by,
226, 318, 378;
as indicator of fiscal sustainability,
186;
of United States,
40, 186
budget surpluses, of United States,
183
building industry.
See construction industry
Bundesbank,
354
Bureau of Engraving and Printing,
361
Burma, international sanctions on,
452
Bush administration (1989–1993),
453
Bush administration (2001–2009): outsourcing of federal jobs,
416;
Social Security reform proposals,
465;
tax cuts,
83, 85, 355;
tax proposals,
85–86;
war on terrorism,
182;
withdrawal from Kyoto protocol,
219–20
business cycles,
47–51;
Austrian School view,
26, 569;
causes,
48–49;
consensus explanations,
381;
countercyclical fiscal policy,
184, 550;
dating,
48;
econometric models,
598;
effects of shocks,
578;
forecast errors and,
434;
historical record,
49–50, 528;
Keynesian stabilization policies,
317, 318, 341–42;
Keynesian view,
49, 432–33;
moderation,
50;
new classical view,
49, 318, 319, 376–77;
peaks,
48;
persistence,
377;
role of expectations,
432–33;
role of monetary policy,
48–49;
troughs,
48;
unemployment,
504;
in United States,
48.
See also recessions
C
cable television,
495
cabotage laws,
342
CAFE (Corporate Average Fuel Efficiency standards),
153
California Contract Cities Association,
416
California Power Exchange,
144
California Public Utilities Commission (CPUC),
144
campaign finance,
51–53;
corporate employee contributions,
52;
expenditures,
53;
free-speech issues,
51;
individual contributions,
52, 53;
reforms,
53;
regulation,
51, 52, 53;
relationship to actions of elected officials,
52, 75;
relationship to electoral results,
51–52;
wealthy candidates,
51
Canada:
floating exchange rate,
571;
immigration,
256;
inflation indexing of tax brackets,
572;
natural gas exports,
370, 371;
North American Free Trade Agreement,
299–300, 427;
oil exports,
382;
protectionism,
547
CAP (Common Agricultural Policy),
166
capital:
definition,
53, 532;
incentives to accumulate,
554;
mobility,
199;
physical,
26, 304–8;
ratio to labor,
53–54, 418;
role in economic growth,
593, 599.
See also human capital
capital account,
28–29, 290–91, 293, 297.
See also balance-of-payments accounts; international capital flows
capital controls,
199
capital flows, international.
See international capital flows
capital gains taxes,
53–57;
avoidance,
54, 55;
debates on,
83–84;
definition,
54;
effects of inflation,
265;
eliminating,
83–84, 560;
impact of changes,
55–57;
inefficiency,
54–55;
rate cuts,
56–57, 83, 85, 492;
relationship of rates to stock prices,
55;
relationship to new business creation,
55–56;
revenues,
54, 55;
unique features,
54
capital goods, heterogeneity,
26
capitalism,
57–60;
benefits,
59;
creative destruction,
101–4, 155, 272, 586;
critics of,
58–60;
division of labor (specialization),
60, 115, 200, 603;
emergence,
57–58;
entrepreneurship in,
156–57;
Marxist view,
58, 59, 338–39;
profits,
419–20;
role of competition,
75.
See also economic freedom; free markets
capital markets:
efficiency,
138–42;
excess returns,
589;
regulation,
90;
risk,
589.
See also asset prices; efficient markets theory; stock markets
Carfax,
521
Carlson, Chester,
272
Carnegie, Andrew,
58
cartels,
61–63;
agricultural,
63;
airline,
74;
antitrust prosecutions,
62–63;
cheating by members,
61, 62, 74–75, 383;
conditions discouraging,
62–63;
consensus in,
62;
failures,
62;
in fascist economies,
172, 173;
government facilitation,
13, 63, 75, 233, 234, 578;
rarity,
63;
restraint of trade,
11;
sports leagues,
474;
successful,
61–62.
See also antitrust; OPEC
cash-flow tax.
See consumption tax
Cassel, Gustav,
528
Castro, Fidel,
256
catallactics,
24
cell phones,
495–96
central banks:
abolition of,
71–72;
anti-inflation policies,
318–19, 554;
Bank of England,
179, 223, 318, 580;
Bundesbank,
354;
foreign exchange reserves,
197;
foreign exchange trading,
197;
operation of gold standard,
223;
power,
353;
sterilization operations,
197, 223;
in transition economies,
500;
U.S. government securities held by,
293.
See also European Central Bank; Federal Reserve
central planning:
advocates of,
75, 124, 466–68, 554–55;
allocation of resources,
549;
by Defense Department,
110;
drawbacks,
201, 390;
information problems,
269;
New Deal programs,
173;
problems with,
110, 466–68, 499, 541;
in Soviet Union,
466–67, 468.
See also socialism
CFCs (chlorofluorocarbons),
402
Chamberlin, Edward H.,
581–82
Champernowne, David,
597
charity,
63–66;
arts funding,
19, 64;
donations to,
34;
foreign aid,
194–95;
giving as proportion of GDP,
64;
during Great Depression,
64–65;
history,
64–65;
motives for,
64;
recipients,
64, 65;
Smith on,
590–91;
volunteer work,
34–35, 64.
See also nonprofit organizations
charter schools,
134
chartists,
139
child labor,
58
children:
Medicaid coverage,
514;
poverty rates,
406, 408;
property rights to toys,
424;
unmarried mothers,
407, 408.
See also education
China:
communism,
67;
economic freedom,
68, 125–26;
economic policies,
68, 130;
one-child policy,
588;
productivity,
206;
state-owned enterprises,
415;
trade surplus with United States,
206;
wages,
206
chlorofluorocarbons (CFCs),
402
Church of England,
57
CIO (Congress of Industrial Organizations),
233
Civil Rights Act of 1964, Title VII,
216
civil rights movement,
119
Clay, Henry,
75
climate change.
See global warming
Clinton administration:
Council of Economic Advisers,
596;
Kyoto protocol,
219;
welfare reform,
438, 511–12;
World Trade Organization meetings,
300
cliometrics,
575
closed-end mutual funds,
35
cognitive psychology,
450
cold war,
194
collateral trust bonds,
42
collective goods.
See public goods
colleges and universities:
costs,
249;
enrollments,
249;
female students,
249;
financial aid,
134;
general education requirements,
134;
government funding,
130, 134–36;
loans,
135;
private,
135;
public,
135;
racial preferences in admissions,
118;
rate of return to education,
136, 248;
sports teams,
320;
tuition charges,
135.
See also education
commodity futures:
energy,
151, 210, 371;
as insurance,
151, 209;
markets,
207, 209;
orange juice,
210;
trading,
208
Common Agricultural Policy (CAP),
166
common currency areas.
See monetary unions
common-pool problems,
31–32
commons.
See tragedy of the commons
common stock.
See stock
communications.
See telecommunications
communism,
66–69;
central planning,
124;
in China,
67;
collapse,
67–68, 337, 340, 499;
in Eastern Europe,
67, 146, 337, 555;
economics of,
66;
fascist opposition to,
172–73;
fear of during cold war,
194;
Marx’s conception,
563;
in Soviet Union,
66–68, 114, 115, 466–67.
See also Marxism; socialism; transition economies
Compagnie des Indes,
46–47
compensation test,
544
competing money supplies,
71–73
competition,
73–76;
activity of,
25;
assumption of perfect information,
267;
costs,
74;
creative destruction and,
102;
functions,
75;
global,
469, 470–71;
information needed,
74;
monopolistic,
581–82;
nonprice,
74;
perfect,
58, 75, 586;
real,
58;
regulation inhibiting,
75.
See also antitrust
compound interest,
288
computer industry:
effects of trade barriers,
207;
innovation,
275.
See also Internet; software companies
concentration.
See industrial concentration
concentration ratio,
257
Congress of Industrial Organizations (CIO),
233
conscription,
76–77;
effects on military wages,
76;
inequities,
76–77;
negative effects,
76–77;
opponents,
534;
supporters,
76;
as tax on military service,
76;
in United States,
76, 234
conservation, private choices,
203–4
Constitution, U.S.:
Bankruptcy Clause,
31;
intellectual property protection,
284;
Second Amendment,
111
construction industry, effects of minimum wages,
347
consumed-income tax.
See consumption tax
consumer price indexes,
77–81
Consumer Product Safety Commission,
82
consumer sovereignty,
556
consumer spending.
See consumption
consumer surplus,
562–63
consumption:
conspicuous,
535, 600;
deferred,
456;
effects of tax cuts,
434;
foregone,
304–5, 307, 419–20;
habit persistence,
434;
influence of monetary policy,
356;
life-cycle model,
36, 569–70;
permanent income theory,
433–34;
relationship to income,
36;
share of GDP,
368
contingent valuation method,
38
contraceptives,
327
convergence behavior,
114
convertible bonds,
42
copyrights:
duration,
284, 286, 287–88;
fair use,
287;
file-sharing issues,
287;
law,
284, 287;
monopoly conferred by,
285–86.
See also intellectual property rights protection
Corporate Average Fuel Efficiency (CAFE) standards,
153
corporate bonds,
41–42;
compared to government bonds,
225;
default risk,
41;
factors in use of,
86–89, 267;
investment-grade,
313;
junk bonds,
41, 313–16, 462;
legal factors,
89;
outstanding amounts,
86, 94;
private placements,
313;
ratings,
41;
types,
41–42
corporate financial structure,
86–89;
debt/equity ratios,
86–87;
determinants of,
86–89;
influences of taxes,
93–94;
M&M theorem,
86, 567, 570;
“pecking order” model,
88.
See also corporate bonds; stock
Corporate Fraud Task Force,
91
corporate governance,
89–92;
agency problem,
87–88, 89, 334, 335;
equity ownership by managers,
90;
exchange listing requirements,
90;
internal controls,
91;
legal environment,
90–91;
management accountability,
91;
market forces,
90;
questioning of,
90;
reforms,
90–92;
separation of ownership and management,
60, 87, 89, 95, 96–97, 334.
See also market for corporate control
corporate scandals.
See accounting scandals
corporate taxation,
92–95;
deductibility of interest payments,
94;
distinction from individual taxation,
92;
double,
84, 87, 492;
economic effects,
93–94;
history,
93;
incidence,
92–93, 94, 491;
income tax,
92–93, 490, 492;
of multinational companies,
94;
proportion of federal revenues,
93;
rates,
92;
by states,
93
corporations,
95–98;
agency costs,
87–88, 89, 334, 335;
bankruptcies,
31, 32–33, 181;
campaign contributions by employees,
52;
comparison to partnerships,
95;
creating,
95;
criticism of,
60, 97;
definitions,
95;
democratic analogy,
97;
labor conflicts,
320;
limited liability,
96;
multinational,
94, 99;
private,
334;
public,
333, 334;
reputations,
43, 44, 58, 81, 82, 268–69;
separation of ownership and management,
60, 87, 89, 95, 96–97, 334;
state charters,
94, 95;
Subchapter S status,
94.
See also market for corporate control
corporatism,
172
corruption,
98–101;
in Africa,
99, 122, 194;
business-to-business,
98;
country rankings,
99;
economic effects,
98–99;
facilitation payments,
98, 99;
government,
98–99;
legal penalties,
99;
in rationing schemes,
410;
reducing,
100;
relationship to poverty,
98;
in transition economies,
502;
in United States,
99
Corzine, Jon,
51
cost-benefit analysis.
See benefit-cost analysis
cost of living,
78
costs:
as competitive advantage,
74;
marginal,
331;
opportunity,
25, 385, 525;
subjectivity,
24–25.
See also transactions costs
countervailing duties,
426–27
covered interest arbitrage,
199
covered interest parity,
199
CPUC (California Public Utilities Commission),
144
creative destruction,
101–4;
effects on employment,
102–4, 272;
innovation by entrepreneurs,
586;
introduction of new products,
101–2, 104, 155;
productivity growth and,
102–3;
technological change,
272;
in transportation,
101–2
creeping inflation,
545
crime,
104–7;
costs and benefits,
525;
deterrent effect of punishment,
106, 325;
economic analysis,
104–7;
organized,
105;
rights of accused,
325;
theft,
106.
See also corruption; law enforcement
culture.
See arts
currencies:
coins and notes,
361;
competition,
71;
fiat,
71, 72, 73, 172, 351, 360;
foreign exchange market,
197–200, 210, 528;
German,
217–18;
introduction to end hyperinflation,
252;
in money supply,
355, 360, 361;
vehicle,
197.
See also euro; exchange rates; U.S. dollar
current account,
28, 29, 290–91, 292–93;
deficits of developing countries,
342–43;
surpluses,
343;
U.S. deficit,
292, 293, 297, 342–43, 456.
See also balance-of-payments accounts
customs unions:
definition,
299;
exceptions for in WTO rules,
164;
trade creation and trade diversion,
166, 300, 601–2.
See also European Economic Community
D
Dalkon Shield,
327
Danish Competition Council,
63
DC (defined contribution) plans,
386
debentures,
42
Debreu, Gerard,
530
debt/equity ratios,
86–87
decision making:
biases,
547–48;
bounded rationality,
34, 35, 590;
risk estimation errors,
450, 548;
under uncertainty,
547–48.
See also behavioral economics; public choice
defense,
107–11;
central planning,
110;
civil liberties issues,
111;
demand for,
108–9, 398;
expenditures,
107, 108, 499, 501;
foreign procurement,
109;
free-rider problem,
107–8, 431;
international alliances,
109;
optimal amount,
108;
private benefits from spending,
108;
production of goods,
109–10.
See also military
Defense Department.
See U.S. Department of Defense
deficits.
See budget deficits
defined contribution (DC) plans,
386
demand,
111–13;
curves,
481, 561–62;
derived,
565;
elasticity,
112, 562;
income levels and,
112–13;
law of,
111–12;
microeconomic theory,
343–44.
See also aggregate demand
democracy:
in corporations,
97;
in Eastern Europe,
502;
expansion,
229;
legislatures,
429;
majority rule,
108, 396, 430;
provision of public goods,
108;
voting rights,
229.
See also elections; political behavior
Demsetz, Harold,
24
depository institutions,
178–79, 355, 361.
See also banks; financial institutions; savings and loans
depreciation, accelerated,
306
deregulation:
airline,
6–10, 60, 440;
benefits,
488;
corruption reduced by,
100;
of financial industry,
177;
of savings and loans,
460–61;
of surface freight transportation,
60, 440, 485–89;
of telecommunications,
494;
in United States,
6–7, 440.
See also regulation
destruction, creative.
See creative destruction
developing countries:
agriculture,
6, 557, 585–86;
artists from,
20;
capital controls,
199;
capital flight,
293;
current account deficits,
342–43;
dual economies,
557;
economic growth,
557–58;
foreign aid,
194–97;
foreign direct investment in,
293–94;
foreign exchange gap,
195;
international capital flows,
291, 293;
international trade,
6, 296–97, 558;
life expectancies,
129, 402;
population growth,
402;
rural poverty,
405, 585–86;
savings gap,
195;
World Bank loans,
194, 195–96
Diamond, Peter,
568
digital rights management (DRM),
287
directors:
elections,
97;
independence,
90;
insiders,
97;
insider trading by,
276, 277;
relations with managers,
90;
replacing,
333;
role,
95, 334;
stock owned by,
90;
of takeover targets,
336
disaster recovery,
113–16;
antisocial and prosocial behavior,
114;
convergence behavior,
114;
factors in recovery,
114–15;
population movements,
115;
preparations,
115;
role of government,
115;
safety nets,
113;
speed of recovery,
113
discrete choices,
564
discrimination,
116–19;
in bank lending,
181;
bases,
117;
causes of different outcomes,
116–17;
costs,
116, 522–23, 525;
gender-based,
215, 273;
government intervention and,
116, 119;
by labor unions,
321;
laws prohibiting,
181, 216;
officially sanctioned,
118–19;
statistical,
117;
wage disparities and,
543.
See also apartheid
disposition effect,
36
distribution of income,
119–23
division of labor:
in bureaucracies,
429;
in capitalism,
60, 115, 200, 603;
role of telecommunications and information technology,
469, 494;
Smith on,
19, 494, 591;
Turgot on,
599.
See also specialization
divorce, economic analysis of,
529–30
Dixit, Avinash,
426
doctors.
See physicians
DoD.
See U.S. Department of Defense
DoJ.
See U.S. Department of Justice
dollar, Canadian,
571
dollar, U.S.
See U.S. dollar
dollarization,
253
Dorfman, Robert,
583
Dornbusch, Rudiger,
198
DoT.
See U.S. Department of Transportation
dot-com stocks.
See Internet stocks
Dow Chemical Company,
328
draft.
See conscription
Drèze, Jean,
588
DRM (digital rights management),
287
drugs.
See pharmaceutical industry
dual economies,
557
DuBois, W. E. B.,
321
dumping, antidumping duties,
426–27
Dvorak, August,
303
dynamic equation of exchange,
263–64
dynamists,
273–74
E
Eastern Europe:
communist regimes,
67, 146, 337, 555;
conscription,
77;
democratic governments,
502;
economic freedom,
126, 159–60;
economic growth,
502;
environmental damage,
202;
EU members,
164, 165, 499, 502;
free-market reforms,
68;
government debt defaults,
186;
NATO members,
77;
transitions from communism,
115, 484, 499–502
eBay,
302
Eccles, Marriner,
176
econometric models,
188–94;
autoregressive conditional heteroskedasticity (ARCH),
530–31;
cointegrated time series,
537–38;
complete,
190;
errors in,
190;
Lucas critique,
559;
multiequation,
598, 602;
policy analysis,
193;
predictions based on,
190;
probability theory and,
538;
structural,
191–93;
of U.S. economy,
598
economic analysis of law.
See law and economics
economic freedom,
124–27;
benefits,
75;
in China,
68;
contrasted with central planning,
124;
country rankings,
68, 125–26, 308;
in former Soviet bloc,
68;
increases in,
124, 125;
indexes,
124–25, 126, 156;
key ingredients,
124;
measuring,
124–25;
promotion by governments,
124;
relationship to economic results,
126–27, 146, 148, 156–57;
relationship to entrepreneurial activity,
156–57, 201;
relationship to environmental quality,
159–60;
relationship to political freedom,
125, 545;
relationship to social outcomes,
126;
relationship to standards of living,
124
economic growth,
128–31;
compound rates,
128;
convergence rates,
147–48;
determinants,
145, 147–48;
effects on income distribution,
553;
empirics,
145–49;
forecasting,
191;
future,
130–31;
Harrod-Domar model,
539, 593;
importance of higher rates,
147;
income per capita,
128, 476, 557–58;
meta-ideas and,
130;
natural rate,
539;
neoclassical model,
147, 149;
Okun’s law,
576;
policies promoting,
148;
population growth and,
403–5;
product innovation and,
128–29, 130;
relationship to economic freedom,
126–27, 146, 148, 156–57;
relationship to entrepreneurial activity,
155;
relationship to environmental quality,
158, 300;
relationship to marginal tax rates,
329–30, 482, 484;
relationship to per capita income,
557–58;
role of education,
129, 131;
role of investment,
304–5;
rule of law and,
145, 148, 159–60;
Solow’s work on,
147, 593;
sources-of-growth accounting,
593;
standard of living and,
475–78, 515;
trade liberalization and,
148;
warranted,
539
economic quasi-rents,
481
economics, definition of,
581
economic sanctions.
See sanctions
economies of scale:
industrial concentration and,
258;
monopolies created by,
365, 370;
in urban transportation,
507, 508
education,
131–36;
achievement test scores,
131–32;
charitable giving to institutions,
64;
compulsory,
132;
early childhood,
407;
elementary,
131–33;
expenditures,
131–32;
family influences,
250;
home schooling,
132;
as investment,
147, 525, 586;
opportunity costs,
385;
private schools,
132–33, 134;
productivity decline,
131;
public schools,
132–33, 134;
quality,
248;
racial segregation,
572;
rate of return to,
136, 248;
reforms,
134;
role in economic growth,
129, 131;
school choice programs,
134, 592;
school performance,
131, 134;
secondary,
131–33, 147, 248;
subsidies,
130, 134–36, 581;
teachers,
133–34;
voucher programs,
134, 592;
of women,
216, 249.
See also colleges and universities; human capital
EEC.
See European Economic Community
efficiency,
136–38;
assumption of perfect information,
267;
critics of use in public policy decisions,
137;
definition,
136;
monetary valuation,
136–37;
role of private ownership,
137
efficient capital markets,
138–42
efficient markets theory (EMT):
asset prices,
35, 45, 138, 433;
challenges to,
140;
semistrong form,
139;
stock market crash of 1987 and,
140–41;
strong form,
139;
usefulness,
141;
violations,
35–36;
weak form,
139
Ehrlich, Anne,
158
elderly:
family net worth,
437, 458–59;
growing proportion of population,
185–88, 402–3;
health care,
185, 402, 403;
poverty rates,
406, 459.
See also Medicare; retirement; Social Security
elections:
median-voter theorem,
428–29;
participation rates,
429;
political futures market,
210;
voter ignorance,
429;
voting rights,
229.
See also campaign finance; political behavior
electricity:
competitive markets,
143–44;
consumption,
142;
deregulation,
144;
distribution as natural monopoly,
365;
external costs,
151–52;
ownership structure,
142–43;
power sources,
142, 143, 150, 151–52, 371, 399, 401–2;
prices,
142, 144;
regulation,
142–45, 151, 169, 595
electric vehicles,
150
Ellickson, Robert,
593
eminent domain,
60
empirics of economic growth,
145–49
employment:
effects of technological change,
102–4;
effects of trade barriers,
437;
full,
48, 317, 354, 526, 550;
influence of monetary policy,
379, 526;
job safety,
311–12;
offshoring,
342, 469;
protectionist efforts to save jobs,
206–7, 342.
See also labor market; occupations; unemployment; women’s employment
EMT.
See efficient markets theory
EMU.
See European Monetary Union
energy,
150–54;
conservation,
152;
consumer responses to price increases,
150–51;
costs,
150;
crises,
374, 382;
efficiency,
150;
expenditures,
151;
external costs,
151–52;
government intervention in markets,
153–54;
natural gas,
370–72;
renewable,
150;
research and development,
152–53;
sources,
150, 151;
subsidies,
151, 153–54;
trading,
169.
See also electricity; fossil fuels; natural resources; oil
energy intensity,
374
energy options,
210
Energy Policy Act of 1992 (EPAct),
143
Engels, Friedrich,
563
England.
See United Kingdom
Engle, Robert F.,
530–31
Enron,
90
entrepreneurs:
definition,
154–55;
examples,
54;
“gazelle,”
155;
innovations,
25, 155, 274, 586;
“lifestyle,”
155;
in rural areas,
155–56
entrepreneurship,
154–57;
academic understanding,
154–57;
creative destruction and,
102;
definition,
154;
government promotion of,
155, 156, 157;
measuring,
155;
profits,
420;
relationship to economic freedom,
156–57, 201;
relationship to economic growth,
155
environmental damage:
air pollution,
153, 170, 210, 399, 401–2;
costs,
152, 404–5;
effects of resource consumption,
151–52, 375;
externalities,
170;
as market failure,
202;
property rights issues,
202–3;
toxic waste,
203, 400–401, 436;
water pollution,
400.
See also environmental quality; global warming
environmentalism, free-market,
202–5
Environmental Protection Agency (EPA):
costs of pollution,
152;
emissions-trading programs,
210, 440;
establishment,
399;
regulations,
441, 442, 447;
Superfund program,
400–401;
toxic waste cleanup,
203, 400–401, 436
environmental quality,
158–60;
ethical issues,
162–63;
improvements,
158–59;
local standards,
202–3;
measures,
158;
property rights and,
160, 202–3, 204–5, 431–32;
as public good,
202, 431–32;
relationship to economic freedom,
159–60;
relationship to economic growth,
158, 300;
resource use issues,
151–52, 162–63, 375;
role of markets,
400;
waste disposal issues,
162–63, 203.
See also environmental damage; recycling
environmental regulation:
approaches,
170, 441;
benefit-cost analysis,
38–39, 441–42;
compliance costs,
152, 153, 165, 170, 399, 400, 401;
effects on energy production,
143;
effects on home prices,
246;
federal role,
399–400;
pollution controls,
399–402, 441;
risk levels,
447;
standards,
153, 400, 401;
tradable permits,
170, 210, 401–2, 440;
water pollution,
400
EPA.
See Environmental Protection Agency
EPAct.
See Energy Policy Act of 1992
equipment obligations,
42
equities.
See stock
ETFs.
See exchange-traded funds
E-toys,
302
EU.
See European Union
Eucken, Walter,
217
euro:
criteria for joining,
360;
criticism of,
73;
effects on trade,
199;
future effects,
359;
introduction,
164, 186.
See also currencies; European Monetary Union
Euronext.liffe,
209
Europe:
anti-inflation policies,
318–19;
central banks,
354, 360;
depression of 1980s,
318–19;
guild system,
575, 599;
social security programs,
463;
wages,
543.
See also Eastern Europeand individual countries
European Coal and Steel Community,
163
European Free Trade Area,
299
European System of Central Banks,
360
European Union (EU),
163–66;
agricultural subsidies,
5, 166;
bureaucracy,
165;
Common Agricultural Policy,
166;
common market,
164, 299;
constitution,
164;
distributive programs,
166;
enlargement,
164, 165, 499, 502;
free-trade agreements with nonmembers,
300;
harmonization,
165, 299;
internal trade,
164, 199;
labor mobility,
572;
Maastricht Treaty,
186, 360;
members,
164;
“Open Skies” agreements,
9;
origins and development,
163–64;
regulation,
165;
sanctions on other countries,
18, 455–56;
Single European Act,
164
exchange rates:
appreciation,
197;
definition,
197;
depreciation,
197;
determination,
198;
devaluations,
341;
effects of trade barriers,
207;
fixed,
197, 222–23, 230–31, 358, 571;
floating,
197, 356, 571;
forward,
199;
future,
199;
impact of fiscal policy,
183;
long-run equilibrium,
198;
managed float,
197–98;
monetary policy and,
356;
nominal,
198;
overshooting model,
198;
pegged,
198;
purchasing power parity,
198, 297, 528;
random walk,
198;
real,
198;
relationship to interest rates,
183, 198;
relationship to international trade,
341, 359;
relationship to investment,
358–59;
spot,
199;
volatility,
198.
See also currencies; foreign exchange market; gold standard
exchange-risk premium,
199
exchange-traded funds (ETFs),
479
expenditures tax.
See consumption tax
exports:
mercantilist view,
340, 341;
subsidies,
5;
voluntary restrictions,
426.
See also international trade
externalities,
169–72;
arguments against government intervention,
171;
of energy use,
151–52, 170;
government intervention justified by,
170, 440–41, 577, 596–97;
measuring,
170;
negative,
169, 170–71, 577;
positive,
169, 171, 577
extinctions,
159
Exxon Valdez,
506
F
“fair trade” laws,
426–27
families:
economic mobility,
123, 250;
education levels,
250;
income inequality,
119–20;
influences on children,
250.
See also households
farming.
See agriculture
fascism,
172–74;
central planning,
124;
compared to socialism,
172;
distinction from interventionism,
172;
economic policies,
172;
in Germany,
173;
influence on New Deal,
173;
in Italy,
173, 577;
state role in economy,
172, 173
FCC.
See Federal Communications Commission
FDA.
See Food and Drug Administration
Federal Communications Commission (FCC):
cell telephone licenses,
495–96;
radio licenses,
99, 496;
spectrum management,
495–97;
wireless bandwidth auctions,
22–23, 522
federal funds,
355
federal government.
See U.S. government
Federal Highway Administration,
486
Federal Housing Administration (FHA),
513
Federal Republic of Germany.
See Germany
Federal Reserve,
174–78;
anti-inflation policies,
50, 178, 264, 266, 318, 353, 554;
Burns as chairman,
177, 528;
discount rate,
175, 176, 231, 232, 355, 361, 362;
establishment,
50;
financial regulation function,
179;
functions,
174;
gold holdings,
175, 176, 231;
Greenspan as chairman,
178, 353, 362, 554;
independence,
176, 353;
inflation targets,
362;
interest rate policies,
49, 355, 357;
lending to illiquid banks,
180, 355–56;
Martin as chairman,
176–77;
member institutions,
355;
monetarist policies,
175, 351–52;
monetary policy procedures,
355–56, 361, 362;
money supply control,
48–49, 177, 178, 263;
in 1920s,
175–76, 231;
open-market operations,
176, 263, 355, 357, 361, 362;
original system,
174–75;
power,
353;
recessions caused by policies,
48–49, 353, 357;
reserve requirements changes,
233, 357, 361;
reserve tests,
355;
responses to Great Depression,
175–76, 231, 232, 233;
responsibility for Great Depression,
534;
Volcker as chairman,
177–78, 351, 353, 357, 362, 460
Federal Reserve Banks:
borrowing from,
355;
currency holdings,
361;
customers,
355;
functions,
175;
organization,
174
Federal Reserve Board,
174–75
Feinstein, Charles,
260
FERC.
See Federal Energy Regulatory Commission
FHA (Federal Housing Administration),
513
films.
See movie industry
FILP (Fiscal Investment and Loan Program),
310
financial crises, in transition economies,
500–501
financial institutions:
credit unions,
178–79, 180;
deregulation of industry,
177;
international transactions,
291;
purposes,
178;
types,
178–79.
See also banks; depository institutions; insurance companies; savings and loans
financial regulation,
178–82;
agencies,
179;
capital requirements,
179, 531;
compliance,
178, 179, 181–82;
deposit insurance,
180–81, 459–60, 462, 498;
enforcement,
179, 182;
goal,
182;
history,
179;
insolvency,
179–80;
reforms,
180–81;
safety-and-soundness,
178–80;
savings and loans,
180, 459–61, 462–63;
securities markets,
91, 179, 277, 279–80
Finsbury Group Ltd.,
315
Firestone,
43
first-mover advantages,
302
fiscal gap,
187–88
Fiscal Investment and Loan Program (FILP),
310
fiscal policy,
182–85;
automatic stabilizers,
184;
contractionary,
182, 184;
countercyclical,
184, 550;
definition,
182;
effects on economy,
182–84;
effects on exchange rate,
183;
effects on saving rate,
184–85, 458;
effects on trade balance,
183;
in European Union,
164, 360;
exchange rate regimes and,
571;
expansionary,
182–83, 184;
during Great Depression,
233, 234;
Keynesian,
355, 483, 550;
long-run effects,
184;
political issues,
185;
in recessions,
184, 226–27, 550;
relationship to monetary policy,
355;
responses to Great Depression,
232;
Ricardian equivalence,
185, 226–27, 378;
supply-side approach,
482–84;
sustainability,
185–88.
See also budget deficits; taxes
fiscal relativity,
186–87
Fisher relationship,
265
Fitzsimmons, Cotton,
472
Fleming, J. Marcus,
571
FMC,
327
Fogel, Robert W.,
532–33
food:
effects of global warming,
220;
famines,
403, 588;
population growth and supply of,
561;
price controls,
115;
prices,
166, 403, 437;
production increases,
403, 562.
See also agriculture
foreign aid,
194–97;
arguments for,
194;
conditionality,
195–96;
corrupt use of,
194;
economic case for,
195, 196;
effects on poverty,
194, 195, 196;
humanitarian motives,
194, 196;
industry,
196;
Marshall Plan,
218–19, 342;
origins,
194;
political motives,
194;
to transition economies,
501
Foreign Corrupt Practices Act,
99
foreign direct investment:
in developing countries,
293–94;
income from,
293;
outflows from industrialized countries,
293–95;
from United States,
295;
in United States,
293, 295
foreign exchange market,
197–200;
arbitrage,
528;
forward,
199;
futures,
207, 209;
hedging,
198–99, 209;
options,
197, 210;
participants,
197;
spot,
197;
trading volume,
197, 199.
See also currencies; exchange rates
fossil fuels:
coal,
143, 399, 546;
electricity generation from,
143, 399;
global warming caused by burning,
204, 219, 375;
natural gas,
370–72;
use in United States,
150.
See also energy; oil
401(k) plans,
36–37
France:
budget deficits,
186;
cultural protectionism,
20;
European Coal and Steel Community,
163;
gold standard,
223, 231;
labor force participation,
330;
laissez-faire policies,
579, 599;
marginal tax rates,
330;
Mississippi bubble,
46–47;
nuclear weapons tests,
453;
Physiocrats,
579, 599–600;
shipping laws,
341
Franklin, Benjamin,
288
Fraser Institute,
124
free banking systems,
71–73
free-market environmentalism,
202–5
free markets,
200–202;
arguments for,
534;
creative destruction,
101–4, 155, 272, 586;
criticism of,
201–2, 596–97;
development,
200–201;
entrepreneurship,
201;
exchanges,
200;
French policies,
579, 599;
government roles,
591–92;
importance of property rights,
201;
innovation in,
275;
institutional flexibility,
566;
moderate view,
588.
See also economic freedom; markets
free-rider problems:
examples,
431;
in national defense,
107–8, 431;
private solutions,
593;
for shareholders,
334.
See also public goods
free trade,
205–7;
arguments for,
425, 537;
benefits,
298;
as component of economic freedom,
125;
definition,
298;
fears of lost jobs,
206, 342;
mercantilist argument against,
200;
public attitudes toward,
205;
within United States,
206.
See also international trade agreements; protectionism; trade liberalization
Freiburg school,
217
French, Kenneth,
140
Friedland, Claire,
595
Friedman, Milton:
accelerationist hypothesis,
351;
biography,
533–34;
constant-money-growth rule,
351;
criticism of Phillips curve,
351, 392, 534, 559;
on free markets,
217, 534;
on gold standard,
224;
on inflation,
264, 396, 534;
Knight and,
551–52;
as monetarist,
350, 354–55, 534;
monetary reform proposals,
434;
on money,
71, 350–51;
on money supply,
354–55, 534;
on natural rate of unemployment,
318, 351, 354, 392–93, 504;
on occupational licensing,
82–83;
permanent income theory of consumption,
433–34;
on price and wage flexibility,
316–17;
on privatization,
159;
on socialism,
467;
Solow on,
593
fringe benefits,
347
Frisch, Ragnar,
535
FTAs.
See free-trade areas
FTC.
See Federal Trade Commission
functional finance,
557
futures:
air pollution,
210;
commodity,
151, 207, 208, 209, 210;
currency,
207, 209;
definition,
207–8;
energy,
151, 210, 371;
financial,
207, 208, 209, 210;
hedging with,
209;
options on,
210;
political,
210;
prices,
208;
stock-index,
207, 210
futures markets,
207–11;
clearinghouses,
208;
electronic trading,
208;
exchanges,
207, 209;
participants,
209–10;
speculators,
209–10;
trading volumes,
209;
uses,
208–9
G
game theory,
211–14;
analysis of monopolies,
13;
application to economics,
574, 575;
application to sports,
472;
brinkmanship strategy,
213;
cooperative and noncooperative games,
573–74;
incomplete information,
539–40;
independence of strategies,
211–12;
leading figures,
211, 570, 573–74;
Nash equilibria,
212, 573–74, 587;
negative-sum games,
201, 211;
positive-sum games,
200, 211;
“trembling hand” equilibrium,
587–88;
win-win transactions,
200;
zero-sum games,
211.
See also prisoners’dilemma
GAO (General Accounting Office),
462
gas.
See natural gas
gasoline:
automobile fuel efficiency,
153, 374;
consumption,
153;
lead in,
402;
price controls,
382, 409–10;
taxes,
153.
See also oil
GATT.
See General Agreement on Tariffs and Trade
GDP.
See gross domestic product
gender gap,
214–16;
definition,
214;
in earnings,
117–18, 214–16;
factors in,
215–16;
in labor force participation,
214, 215;
in occupations,
214–15
General Accounting Office (GAO),
462
General Agreement on Tariffs and Trade (GATT):
agricultural subsidy programs excluded from,
5–6;
founding,
298–99, 342;
negotiating rounds,
299, 342;
tariff reductions,
299;
trade liberalization,
164
General Aviation Revitalization Act of 1994,
326
General Electric,
319
generalized ARCH,
531
George, Henry,
536–37
German economic miracle,
216–19;
abolition of price controls and rationing,
115, 216, 217–18;
comparison to East German economy,
146;
currency reform,
216, 217–18;
free-market policies,
146, 163;
growth,
145, 146;
industrial production,
218;
results,
218;
speed,
113;
tax cuts,
218;
U.S. advisers,
218, 544
Germany:
Allied occupation,
216–18, 219;
Bundesbank,
354;
conditions after World War II,
216–17;
conscription,
77;
defense spending,
109;
economic freedom,
125;
economic growth of East and West,
145, 146;
European Coal and Steel Community,
163;
historical school,
23;
hyperinflation,
251, 252, 354;
insider trading regulations,
277;
Marshall Plan aid,
218–19;
monetary policy,
319;
Nazi rule,
173, 216–17, 252, 541;
population movements,
115;
reparations after World War I,
549;
resistance to Nazis,
217;
social security programs,
463;
welfare state,
229;
World War II,
67, 114, 536
Gerry, Elbridge,
111
Gillette,
275
global warming,
219–22;
adjustment to,
221;
benefits,
171, 220–21;
causes,
204, 219, 375;
costs,
171, 204, 220, 221;
debate on,
159, 171;
economic effects,
220;
evidence,
159;
international agreements,
219–20, 221;
predictions,
219, 221;
sea levels and,
220;
speed,
221
Goering, Hermann,
216–17
Goldberger, Arthur,
551
gold standard,
222–24;
abandonment,
222, 360;
classical period,
222;
costs,
224;
current interest in,
222, 224;
definition,
222;
free banking systems based on,
72;
in interwar period,
222, 230–31;
operation,
222–23, 360;
performance,
223–24;
in United Kingdom,
222, 223, 232;
in United States,
174, 175, 222–24, 230–31
Gompers, Samuel,
322
Gordon, David,
435
Gordon, Robert,
318
Gore, Albert, Jr.,
51
governance.
See corporate governance
government debt,
224–27;
defaults,
186;
definition,
224;
effects on economy,
225–26;
future tax burden,
318, 378, 458;
market values,
225;
measuring,
225;
service obligations,
253;
types,
224;
of United States,
40, 224–25, 293, 355.
See also municipal bonds; U.S. government bonds
government deficits.
See budget deficits
government growth,
227–30;
employment,
230;
expenditures,
227;
in future,
229;
regulation,
227;
responses to crises,
228, 230;
scope,
227–28, 229;
structural change and,
228–29
governments:
advertising by,
3;
bankruptcies,
185–86;
bulk purchases of drugs,
391;
bureaucracies,
399, 429–30, 468, 603;
coercion,
201;
corruption,
98–99;
credibility,
559;
expenditures as proportion of GDP,
227;
incentives of officials,
597;
interventionism,
60, 342;
intervention justified by externalities,
170, 440–41, 577, 596–97;
labor unions representing employees,
320, 322, 416;
measuring sizes,
227;
promotion of economic freedom,
124;
provision of public goods,
107–8;
redistribution programs,
119–21, 437–39, 576;
roles in free markets,
591–92;
time-consistency problem,
553–54.
See also regulation; state; state governments; U.S. government
Granger, Clive W. J.,
537–38
Granger causality,
538
Great Britain.
See United Kingdom
Great Depression,
230–35;
banking crises,
30, 175–76, 180, 232;
causes,
225, 230, 534, 581;
charitable giving,
64–65;
countries affected,
230, 231;
economic policy lessons,
50, 230;
effects on individuals,
230;
Federal Reserve responses,
175–76, 231, 232, 233;
Federal Reserve responsibility,
534;
population movements,
115, 230;
recovery,
230, 233, 234;
stock market crash,
231;
unemployment,
230, 231, 233–34;
wage rates,
231, 233.
See also New Deal
Greenfield, Robert,
73
greenhouse gases.
See global warming
gross domestic product (GDP):
components,
367–68, 369;
definition,
367–68;
deflator,
263;
effects of fiscal policy,
183–84;
per capita,
369;
as welfare measure,
369.
See also economic growth
Grossman, Gene,
426
growth.
See economic growth
Grunberg, Emile,
570
gun control,
105
H
Haiti, sanctions on,
455
Hall, Robert E.,
434
Hammarskjöld, Dag,
604
Hardin, Garrett,
404
Harrod, Roy F.,
539
Harsanyi, John C.,
539–40
Hartrich, Edwin,
218
Hart-Scott-Rodino Act of 1978,
259
Hayek, Friedrich August:
biography,
540–43;
business cycle theory,
569;
criticism of Galbraith,
535;
Denationalisation of Money,
71;
differences from Keynes,
541;
on economic freedom,
545;
on government roles,
542;
influences on,
24, 545;
on information,
269;
on innovation,
273;
on labor unions,
319;
on law and economics,
323;
on monetary competition,
73;
on monetary theory,
541;
on prices,
25;
on socialism,
467–68, 541, 542, 554;
students,
561
head taxes,
489
health care,
235–41;
competition,
237;
consumer-driven,
240, 242–43;
demand for,
242, 332, 392;
differences from other industries,
235;
for elderly,
185, 402, 403;
expenditures,
235, 242, 243, 392;
improvements,
477;
industry structure,
240;
lack of competition,
241–42;
malpractice cases,
325, 327;
managed care,
237–38, 239, 242, 391;
marginal analysis,
332;
outlook,
240;
overuse of,
236, 237;
problems with system,
243–45;
as proportion of GDP,
236;
regulation,
239–40, 241;
socialized,
238, 391;
vaccines,
326;
value of,
236.
See also hospitals; pharmaceutical industry
health insurance,
241–45;
asymmetric information,
596;
community rating,
245;
cost-plus reimbursements,
241;
costs,
237;
coverage,
281;
demand for,
236;
development of market,
241;
effects on prices,
236;
employer-provided,
235–37, 242, 244, 245, 283;
future of,
240;
incentives for use of health care services,
236, 237, 332, 392;
lack of portability,
244;
premiums,
241;
prescription drug coverage,
391;
proportion of health care spending,
235;
regulation,
239–40, 244;
subsidies in tax code,
235–36, 244, 283;
uninsured individuals,
236, 240, 244–45, 391–92.
See also insurance; Medicaid; Medicare
health reimbursement arrangements (HRAs),
242
health savings accounts (HSAs),
242–43
Heckman, James J.,
543–44
Helms-Burton Act,
454
Herfindahl-Hirschman Index (HHI),
257–58
HHI (Herfindahl-Hirschman Index),
257–58
Hicks compensation test,
544
higher education.
See colleges and universities
Higher Education Act,
135
high-yield bonds.
See junk bonds
historical school,
23
Holland.
See Netherlands
Holt, Charles,
168
Hong Kong, economic freedom,
125
Hooker Chemical Company,
203
Hope tax credit,
135
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