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.
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.
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.
Features
- Assumes no previous
background in economics
- Focuses on issues relevant
to an increasingly globalised environment
- Strikes a balance between
theory and application
- Clear writing style and
attractive learning aids (boxes, questions for discussion, exercises and further reading)
Table of Contents
Preface to the third edition xx
Acknowledgements xx
1 The economic policy consensus
Introduction 1
1.1 The economic policy consensus
1.2 Why policy changed
1.3 Implications for the future
1.4 Criticisms of the new consensus
1.5 Will the consensus last?
Summary
Questions for discussion
Exercises
Further reading
2 What makes nations grow?
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
Questions for discussion
Exercises
Further reading
Appendix 2.1: The economics of the new economy
Part I The market system and competition
Introduction to Part I
3 The market system in action
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
Questions for discussion
Exercises
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
Summary
Questions for discussion
Exercises
Further reading
5 The firm in a competitive market
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
Questions for discussion
Exercises
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
Summary
Questions for discussion
Exercises
Further reading
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
Summary
Questions for discussion
Exercises
Further reading
8 Government intervention and the market system
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
Questions for discussion
Exercises
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
Summary
Questions for discussion
Exercises
Further reading
10 Hiring labour and the investment decision
Introduction
10.1 The hiring decision
10.2 The investment decision
10.3 Conclusions
Summary
Questions for discussion
Exercises
Further reading
Part II The macroeconomic framework
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
Summary
Questions for discussion
Exercises
Further reading
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
Summary
Questions for discussion
Exercises
Further reading
13 Understanding interest rates and monetary policy
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
Questions for discussion
Exercises
Further reading
Case study 13.1: Taylor's rule for monetary policy
14 Unemployment and the labour market
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
Questions for discussion
Exercises
Further reading
Appendix 14.1: Unemployment and inflation - the Phillips curve
15 Fiscal policy, budget deficits and government debt
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
Questions for discussion
Exercises
Further reading
Appendix 15.1: The sustainability of debt
16 Business fluctuations and forecasting
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
Questions for discussion
Exercises
Further reading
Part III The global economy
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
Summary
Questions for discussion
Exercises
Further reading
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
Summary
Questions for discussion
Exercises
Further reading
19 Labour migration
Introduction
19.1 Recent trends
19.2 Effects of migration - the basic model
19.3 Migration, public finances and jobs
19.4 Conclusions
Summary
Questions for discussion
Exercises
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
Summary
Questions for discussion
Exercises
Further reading
21 Coping with exchange rates
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
Questions for discussion
Exercises
Further reading
Appendix 21.1: The global foreign exchange market
22 Exchange rate regimes and the euro
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
Questions for discussion
xercises
Further reading
Appendix 22.1: Exchange rate regimes - a brief history
Index
616 pages
