Program trading, the subject of considerable controversy in recent years, is the simultaneous trading of a portfolio of stocks, as opposed to buying or selling just one stock at a time. The New York Stock Exchange defines program trading as any trade involving fifteen or more stocks with an aggregate value in excess of $1 […]
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.
International capital flows are the financial side of international trade.1 When someone imports a good or service, the buyer (the importer) gives the seller (the exporter) a monetary payment, just as in domestic transactions. If total exports were equal to total imports, these monetary transactions would balance at net zero: people in the country would […]
The distribution of income lies at the heart of an enduring issue in political economy—the extent to which government should redistribute income from those with more income to those with less. Whether government should redistribute income is a normative question, and each person’s answer will depend on his or her values. But for many people, […]
The gold standard was a commitment by participating countries to fix the prices of their domestic currencies in terms of a specified amount of gold. National money and other forms of money (bank deposits and notes) were freely converted into gold at the fixed price. England adopted a de facto gold standard in 1717 after […]
Investment is one of the most important variables in economics. On its back, humans have ridden from caves to skyscrapers. Its surges and collapses are still a primary cause of recessions. Indeed, as can be seen in Figure 1, investment has dropped sharply during almost every postwar U.S. recession. As the graph suggests, one cannot […]
In 1969 Dutch economist Jan Tinbergen and Norwegian economist Ragnar Frisch shared the first Nobel Prize in economics “for having developed and applied dynamic models for the analysis of economic processes.” Tinbergen, who held a Ph.D. in physics, had become interested in economics while working on his dissertation, “Minimum Problems in Physics and Economics” (1929). […]
Robert Lucas was awarded the 1995 Nobel Prize in economics “for having developed and applied the hypothesis of rational expectations, and thereby having transformed macroeconomic analysis and deepened our understanding of economic policy.” More than any other person in the period from 1970 to 2000, Robert Lucas revolutionized macroeconomic theory. His work led directly […]