National income accounts (NIAs) are fundamental aggregate statistics in macroeconomic analysis. The ground-breaking development of national income and systems of NIAs was one of the most far-reaching innovations in applied economics in the early twentieth century. NIAs provide a quantitative basis for choosing and assessing economic policies as well as making possible quantitative macroeconomic modeling […]
The Library of Economics and Liberty carries the popular Concise Encyclopedia of Economics, edited by David R. Henderson.
This highly acclaimed economics encyclopedia was first published in 1993 under the title The Fortune Encyclopedia of Economics. It features easy-to-read articles by over 150 top economists, including Nobel Prize winners, over 80 biographies of famous economists, and many tables and charts illustrating economics in action. With David R. Henderson’s permission and encouragement, the Econlib edition of this work includes links, additions, and corrections.
Before the Russian Revolution of 1917, “socialism” and “communism” were synonyms. Both referred to economic systems in which the government owns the means of production. The two terms diverged in meaning largely as a result of the political theory and practice of Vladimir Lenin (1870–1924). Like most contemporary socialists, Lenin believed that socialism could not […]
The foreign exchange market is the market in which foreign currency—such as the yen or euro or pound—is traded for domestic currency—for example, the U.S. dollar. This “market” is not in a centralized location; instead, it is a decentralized network that is nevertheless highly integrated via modern information and telecommunications technology. According to a triennial […]
“ Capitalism,” a term of disparagement coined by socialists in the mid-nineteenth century, is a misnomer for “economic individualism,” which Adam Smith earlier called “the obvious and simple system of natural liberty” (Wealth of Nations). Economic individualism’s basic premise is that the pursuit of self-interest and the right to own private property are morally defensible […]
The population of wealthy countries is getting much older. Between 2005 and 2035, the number of elderly in wealthy countries will more than double, but the number of workers will barely change. This historically unprecedented demographic change portends enormous fiscal stresses because of the high and growing cost of meeting government pension and health-care commitments […]
The entries in this category are on various aspects of the labor market and include discrimination, the gender gap, immigration, job safety, and wages and working conditions.
These deal with various issues in law and economics such as antitrust, liability, and intellectual property.
With the decline in transportation costs, especially across oceans, and with the worldwide decline in trade barriers, international trade has become even more important. Topics include free trade, protectionism, foreign exchange, and international capital flows.
Partly because of the economy-wide effects of money and banking, and partly because of the specific government policies that regulate the money supply and baking, there is a separate category to cover these issues. Entries include ban runs, the Federal Reserve System, and deposit insurance.
Pareto is best known for two concepts that are named after him. The first and most familiar is the concept of Pareto optimality. A Pareto-optimal allocation of resources is achieved when it is not possible to make anyone better off without making someone else worse off. The second is Pareto’s law of income distribution. […]
Gerard Debreu’s contributions are in general equilibrium theory—highly abstract theory about whether and how each market reaches equilibrium. In a famous paper coauthored with Kenneth Arrow and published in 1954, Debreu proved that under fairly unrestrictive assumptions, prices exist that bring markets into equilibrium. In his 1959 book, The Theory of Value, Debreu introduced […]