Joseph Schumpeter (1883–1950) coined the seemingly paradoxical term “creative destruction,” and generations of economists have adopted it as a shorthand description of the free market’s messy way of delivering progress. In Capitalism, Socialism, and Democracy (1942), the Austrian economist wrote: The opening up of new markets, foreign or domestic, and the organizational development from the […]
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.
How Behavioral Economics Differs from Traditional Economics All of economics is meant to be about people’s behavior. So, what is behavioral economics, and how does it differ from the rest of economics? Economics traditionally conceptualizes a world populated by calculating, unemotional maximizers that have been dubbed Homo economicus. The standard economic framework ignores or rules […]
Bankruptcy is common in America today. Notwithstanding two decades of largely uninterrupted economic growth, the annual bankruptcy filing rate has quintupled, topping 1.5 million individuals annually. Recent years also have seen several of the largest and most expensive corporate bankruptcies in history. This confluence of skyrocketing personal bankruptcies in a period of prosperity, an increasingly […]
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 […]
“Law and economics,” also known as the economic analysis of law, differs from other forms of legal analysis in two main ways. First, the theoretical analysis focuses on efficiency. In simple terms, a legal situation is said to be efficient if a right is given to the party who would be willing to pay the […]
As the category\'s name suggests, entries in this category are on important historical developments, two of the main ones being the Industrial Revolution and the Great Depression.
With the decline in transportation costs, especially across oceans, and the recent increase in trade barriers, topics in international trade has become even more important.
Sometimes defined as the theory of the economy as a whole, macroeconomics includes issues such as economic growth, fiscal policy, monetary policy, national income accounts, and unemployment.
With extensive government regulation of many industries, there are many entries on aspects of that regulation, in industries ranging from agriculture, airlines, and energy tp trucking and pharmaceuticals.
Franco Modigliani, an American born in Italy, received the 1985 Nobel Prize on the basis of two contributions. The first is “his analysis of the behavior of household savers.” In the early 1950s Modigliani, trying to improve on Keynes’s consumption function, which related consumption spending to income, introduced his “life cycle” model of consumption. […]
Polish economist Oskar Lange is best known for his contributions to the economics of socialism. His views on the feasibility of socialism changed back and forth throughout his life. While teaching at the University of Kraków in 1934, he outlined, with coauthor Marek Breit, a version of socialism in which the government owned all […]