Compound Rates of Growth In the modern version of an old legend, an investment banker asks to be paid by placing one penny on the first square of a chessboard, two pennies on the second square, four on the third, etc. If the banker had asked that only the white squares be used, the initial […]
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.
Although labor unions have been celebrated in folk songs and stories as fearless champions of the downtrodden working man, this is not how economists see them. Economists who study unions—including some who are avowedly prounion—analyze them as cartels that raise wages above competitive levels by restricting the supply of labor to various firms and industries. […]
When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you cannot spend the money on something else. If your […]
The Phillips curve represents the relationship between the rate of inflation and the unemployment rate. Although he had precursors, A. W. H. Phillips’s study of wage inflation and unemployment in the United Kingdom from 1861 to 1957 is a milestone in the development of macroeconomics. Phillips found a consistent inverse relationship: when unemployment was high, […]
Throughout most of modern history, economic sanctions have preceded or accompanied war, often in the form of a naval blockade intended to weaken the enemy. Only when the horrors of World War I prompted President Woodrow Wilson to call for an alternative to armed conflict were economic sanctions seriously considered. (Wilson claimed that, by themselves, […]
These entries are about real markets and how they work and include advertising, brand names, competition, entrepreneurship, and the free market.
Governments impose a variety of taxes. The analysis of taxes, therefore, requires multiple entries, including marginal tax rates, corporate taxation, and capital gains taxes.
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 banking, there is a separate category to cover those issues. The entries include bank runs, the Federal Reserve system, and the Savings and Loan crisis.
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.
Born in Austria, Fritz Machlup moved to the United States in 1933. He worked in two main areas: industrial organization, with particular emphasis on the production and distribution of knowledge, and international monetary economics. One of Machlup’s most famous articles in industrial organization is his 1946 defense of the economist’s standard assumption that firms maximize […]
Arthur C. Pigou, a British economist, is best known for his work in welfare economics. In his book The Economics of Welfare Pigou developed alfred marshall’s concept of externalities, costs imposed or benefits conferred on others that are not taken into account by the person taking the action. He argued that the existence of […]