Economics for Business

The selective, thematic, policy oriented approach of Economics for Business, combined with its strong emphasis on market structures, monetary policy and interest rates, business fluctuations and globalisation, makes it especially suitable for MBA and other executive programmes, as well as for post-experience conversion courses. http://www.dropshippers.co.za/

Economics for Business focuses on three essential branches of modern economics: competition and the market system; macroeconomics and the economics of openness and globalisation, including the analysis of international trade, foreign investment and exchange rates. The book has a very strong business focus and has been used in the UK on many MBA courses as well as short, often one semester post experience executive courses. It has also proved popular for undergraduate business economics courses. http://www.dropshippers.co.za/

The book examines economics from a business perspective and is selective in its coverage, focusing on setting out the big picture and including topics on the basis that they throw light on issues relevant to business. It has a strong policy perspective. Economic issues are analysed in a policy context, which helps students see the relevance of economics to business decisions. The book adopts a modern approach to macroeconomics, as appropriate for business students, and pays special attention to globalisation, trade liberalisation, economic integration and exchange rates. http://www.dropshippers.co.za/

Table of Contents

• Preface to the third edition
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Acknowledgements 1 The economic policy consensus 1

Introduction 1 1.1 The economic policy consensus 2 1.2 Why policy changed 1.3 Implications for the future 1.4 Criticisms of the new consensus 1.5 Will the consensus last? http://www.dropshippers.co.za/

Summary

Questions for discussion http://www.dropshippers.co.za/

Exercises

Further reading 2 What makes nations grow? http://www.dropshippers.co.za/

Introduction 2.1 Trends in economic growth 2.2 Growth theories 2.3 Human welfare and sustainable growth 2.4 Policy prescriptions for growth 2.5 Conclusions

Summary http://www.dropshippers.co.za/

Questions for discussion

Exercises http://www.dropshippers.co.za/

Further reading

Appendix 2.1: The economics of the new economy http://www.dropshippers.co.za/

Part I The market system and competition

Introduction to Part I 3 The market system in action http://www.dropshippers.co.za/

Introduction 3.1 The market system 3.2 The role of prices 3.3 Movements in demand and supply 3.4 The role of traders and arbitrage 3.5 The efficiency of the market system 3.6 The free market system in social context 3.7 Conclusions

Summary http://www.dropshippers.co.za/

Questions for discussion

Exercises http://www.dropshippers.co.za/

Further reading 4 Market demand and the pricing decision

Introduction 4.1 What is a ‘rational’ consumer? 4.2 Deriving the market demand curve 4.3 Elasticities of demand 4.4 Estimating the demand function 4.5 Price elasticities and the pricing decision 4.6 Conclusions http://www.dropshippers.co.za/

Summary

Questions for discussion http://www.dropshippers.co.za/

Exercises

Further reading 5 The firm in a competitive market http://www.dropshippers.co.za/

Introduction 5.1 Profit maximisation 5.2 Rules for maximising profit 5.3 Cost structure of the firm 5.4 The transaction costs approach 5.5 From cost structure to supply curve 5.6 Conclusions

Summary http://www.dropshippers.co.za/

Questions for discussion

Exercises http://www.dropshippers.co.za/

Further reading 6 The economics of market power

Introduction 6.1 Firm size 6.2 The economics of market power 6.3 How to sustain monopoly power 6.4 Market power with few firms – the case of oligopoly 6.5 Conclusions http://www.dropshippers.co.za/

Summary

Questions for discussion http://www.dropshippers.co.za/

Exercises

Further reading http://www.dropshippers.co.za/

Case study 6.1: The diamond cartel 7 Competition policy, privatisation and regulation

Introduction 7.1 The case for competition 7.2 Competition policy 7.3 Privatisation 7.4 Regulation 7.5 Conclusions http://www.dropshippers.co.za/

Summary

Questions for discussion http://www.dropshippers.co.za/

Exercises

Further reading 8 Government intervention and the market system http://www.dropshippers.co.za/

Introduction 8.1 Income distribution and the equity–efficiency trade-off 8.2 Market failures 8.3 Government intervention 8.4 Government failure 8.5 Conclusions

Summary http://www.dropshippers.co.za/

Questions for discussion

Exercises http://www.dropshippers.co.za/

Further reading 9 Business and the environment

Introduction 9.1 Economic growth and the environment 9.2 Environmental policies 9.3 Policy instruments: design and effect 9.4 Impact on business 9.5 Conclusions http://www.dropshippers.co.za/

Summary

Questions for discussion http://www.dropshippers.co.za/

Exercises

Further reading 10 Hiring labour and the investment decision http://www.dropshippers.co.za/

Introduction 10.1 The hiring decision 10.2 The investment decision 10.3 Conclusions

Summary http://www.dropshippers.co.za/

Questions for discussion

Exercises http://www.dropshippers.co.za/

Further reading

Part II The macroeconomic framework http://www.dropshippers.co.za/

Introduction to Part II 11 Aggregate supply, aggregate demand and the price level

Introduction 11.1 How is gross domestic product (GDP) calculated? 11.2 Potential GDP, actual GDP, and GDP at purchasing power parity (PPP) 11.3 The aggregate supply (AS) curve 11.4 Aggregate demand (AD) and money 11.5 Conclusions http://www.dropshippers.co.za/

Summary

Questions for discussion http://www.dropshippers.co.za/

Exercises

Further reading http://www.dropshippers.co.za/

Appendix 11.1: The money supply process 12 Price stability and central banks

Introduction 12.1 What is price stability? 12.2 Deviation from price stability 1: inflation 12.3 Deviation from price stability 2: deflation 12.4 Benefits of price stability 12.5 Central banks and institutional reform 12.6 Price stability and exchange rate anchors 12.7 Is inflation dead? 12.8 Conclusions http://www.dropshippers.co.za/

Summary

Questions for discussion http://www.dropshippers.co.za/

Exercises

Further reading 13 Understanding interest rates and monetary policy http://www.dropshippers.co.za/

Introduction 13.1 Which interest rate? 13.2 What determines interest rates? 13.3 Interest rates and economic activity 13.4 Monetary policy and interest rates 13.5 The design of monetary policy 13.6 Conclusions

Summary http://www.dropshippers.co.za/

Questions for discussion

Exercises http://www.dropshippers.co.za/

Further reading

Case study 13.1: Taylor’s rule for monetary policy 14 Unemployment and the labour market http://www.dropshippers.co.za/

Introduction 14.1 Facts about unemployment 14.2 Supply-side approach and the market mechanism 14.3 Short-run versus long-run perspectives 14.4 The importance of demand 14.5 Technology, productivity and unemployment 14.6 Labour market policies 14.7 Conclusions

Summary http://www.dropshippers.co.za/

Questions for discussion

Exercises http://www.dropshippers.co.za/

Further reading

Appendix 14.1: Unemployment and inflation – the Phillips curve 15 Fiscal policy, budget deficits and government debt http://www.dropshippers.co.za/

Introduction 15.1 Counter-cyclical fiscal policy 15.2 The limits of fiscal activism 15.3 Public debt and ‘crowding out’ 15.4 Fiscal policy in Europe 15.5 Conclusions

Summary http://www.dropshippers.co.za/

Questions for discussion

Exercises http://www.dropshippers.co.za/

Further reading

Appendix 15.1: The sustainability of debt 16 Business fluctuations and forecasting http://www.dropshippers.co.za/

Introduction 16.1 Business fluctuations – the facts 16.2 What causes fluctuations? 16.3 Business fluctuations and growth 16.4 Forecasting the business cycle 16.5 Macro-forecasts and the firm 16.6 Conclusions

Summary http://www.dropshippers.co.za/

Questions for discussion

Exercises http://www.dropshippers.co.za/

Further reading

Part III The global economy http://www.dropshippers.co.za/

Introduction to Part III 17 Foreign trade: patterns and policy

Introduction 17.1 Trends in global trade 17.2 Explaining the gains from international trade 17.3 Quantifying the gains from trade 17.4 Trade policy and protection 17.5 What determines comparative advantage? 17.6 Conclusions http://www.dropshippers.co.za/

Summary

Questions for discussion http://www.dropshippers.co.za/

Exercises

Further reading http://www.dropshippers.co.za/

Case study 17.1: China and the WTO: the effects of trade liberalisation 18 Capital flows and foreign investment

Introduction 18.1 Capital flows 18.2 Basic model 18.3 Foreign direct investment and multinationals 18.4 Effects of foreign investment 18.5 Conclusions http://www.dropshippers.co.za/

Summary

Questions for discussion http://www.dropshippers.co.za/

Exercises

Further reading 19 Labour migration http://www.dropshippers.co.za/

Introduction 19.1 Recent trends 19.2 Effects of migration – the basic model 19.3 Migration, public finances and jobs 19.4 Conclusions

Summary http://www.dropshippers.co.za/

Questions for discussion

Exercises http://www.dropshippers.co.za/

Further reading 20 The balance of payments: what it is and why it matters

Introduction 20.1 What is the balance of payments? 20.2 Balance of payments problems 20.3 How to correct a balance of payments imbalance 20.4 Conclusions http://www.dropshippers.co.za/

Summary

Questions for discussion http://www.dropshippers.co.za/

Exercises

Further reading 21 Coping with exchange rates http://www.dropshippers.co.za/

Introduction 21.1 How exchange rates work 21.2 Exchange rate theory 21.3 Capital flows and exchange rate volatility 21.4 Strategies for coping with exchange rate risk 21.5 Conclusions

Summary http://www.dropshippers.co.za/

Questions for discussion

Exercises http://www.dropshippers.co.za/

Further reading

Appendix 21.1: The global foreign exchange market 22 Exchange rate regimes and the euro http://www.dropshippers.co.za/

Introduction 22.1 The global exchange rate system 22.2 Floating exchange rates 22.3 Search for stability 22.4 Establishing a single currency – the euro 22.5 Conclusions

Summary http://www.dropshippers.co.za/

Questions for discussion xercises

Further reading http://www.dropshippers.co.za/

Appendix 22.1: Exchange rate regimes – a brief history

Index http://www.dropshippers.co.za/