The Principles of Economics Textbook

Total Page:16

File Type:pdf, Size:1020Kb

The Principles of Economics Textbook The Principles of Economics Textbook: An Analysis of Its Past, Present & Future by Vitali Bourchtein An honors thesis submitted in partial fulfillment of the requirements for the degree of Bachelor of Science Undergraduate College Leonard N. Stern School of Business New York University May 2011 Professor Marti G. Subrahmanyam Professor Simon Bowmaker Faculty Advisor Thesis Advisor Bourchtein 1 Table of Contents Abstract ............................................................................................................................................4 Thank You .......................................................................................................................................4 Introduction ......................................................................................................................................5 Summary ..........................................................................................................................................5 Part I: Literature Review ..................................................................................................................6 David Colander – What Economists Do and What Economists Teach .......................................6 David Colander – The Art of Teaching Economics .....................................................................8 David Colander – What We Taught and What We Did: The Evolution of US Economic Textbooks (1830-1930) ..............................................................................................................10 Mark Skousen – The Perseverance of Paul Samuelson’s Economics ........................................12 Part II: Methodology – Approach Taken and Books Used ............................................................15 Approach Taken .........................................................................................................................15 Books Used ................................................................................................................................16 Part III: Analysis ............................................................................................................................17 Textbook Size .............................................................................................................................17 Consensus Text .........................................................................................................................18 Microeconomics .........................................................................................................................19 Supply and Demand ...................................................................................................................20 Macroeconomics ........................................................................................................................21 Aggregate Supply and Aggregate Demand ................................................................................22 Game Theory ..............................................................................................................................23 Behavioral Economics ................................................................................................................24 Labor Economics ........................................................................................................................26 Economics of the Family ............................................................................................................27 Law and Economics ...................................................................................................................28 Public Economics .......................................................................................................................29 Health Economics ......................................................................................................................30 Industrial Organization ...............................................................................................................31 Environmental Economics .........................................................................................................32 Bourchtein 2 Urban Economics .......................................................................................................................33 Race and Gender ........................................................................................................................34 History of Economic Thought ....................................................................................................35 Money and Banking ...................................................................................................................36 Fiscal Policy ...............................................................................................................................37 Economic Growth ......................................................................................................................38 Development Economics ............................................................................................................39 International Trade .....................................................................................................................40 Part IV: Concluding Thoughts and Future Outlook .......................................................................41 Summary of Findings .................................................................................................................41 The Future of Principles of Economics ......................................................................................43 Exhibit A ........................................................................................................................................45 Exhibit B ........................................................................................................................................46 Exhibit C ........................................................................................................................................47 Exhibit D ........................................................................................................................................48 Exhibit E ........................................................................................................................................49 Exhibit F.........................................................................................................................................50 Exhibit G ........................................................................................................................................51 Exhibit H ........................................................................................................................................52 Exhibit I .........................................................................................................................................53 Exhibit J .........................................................................................................................................54 Exhibit K ........................................................................................................................................55 Exhibit L ........................................................................................................................................56 Exhibit M .......................................................................................................................................57 Exhibit N ........................................................................................................................................58 Exhibit O ........................................................................................................................................59 Exhibit P.........................................................................................................................................60 Exhibit Q ........................................................................................................................................61 Exhibit R ........................................................................................................................................62 Exhibit S.........................................................................................................................................63 Bourchtein 3 Exhibit T ........................................................................................................................................64 Exhibit U ........................................................................................................................................65 Exhibit V ........................................................................................................................................66 Exhibit W .......................................................................................................................................67 Exhibit X ........................................................................................................................................68 Works Cited ...................................................................................................................................71 Bourchtein 4 Abstract Economics plays a large role in today’s society, as it affects the
Recommended publications
  • Marxist Economics: How Capitalism Works, and How It Doesn't
    MARXIST ECONOMICS: HOW CAPITALISM WORKS, ANO HOW IT DOESN'T 49 Another reason, however, was that he wanted to show how the appear- ance of "equal exchange" of commodities in the market camouflaged ~ , inequality and exploitation. At its most superficial level, capitalism can ' V be described as a system in which production of commodities for the market becomes the dominant form. The problem for most economic analyses is that they don't get beyond th?s level. C~apter Four Commodities, Marx argued, have a dual character, having both "use value" and "exchange value." Like all products of human labor, they have Marxist Economics: use values, that is, they possess some useful quality for the individual or society in question. The commodity could be something that could be directly consumed, like food, or it could be a tool, like a spear or a ham­ How Capitalism Works, mer. A commodity must be useful to some potential buyer-it must have use value-or it cannot be sold. Yet it also has an exchange value, that is, and How It Doesn't it can exchange for other commodities in particular proportions. Com­ modities, however, are clearly not exchanged according to their degree of usefulness. On a scale of survival, food is more important than cars, but or most people, economics is a mystery better left unsolved. Econo­ that's not how their relative prices are set. Nor is weight a measure. I can't mists are viewed alternatively as geniuses or snake oil salesmen. exchange a pound of wheat for a pound of silver.
    [Show full text]
  • Global Wealth Inequality
    EC11CH05_Zucman ARjats.cls August 7, 2019 12:27 Annual Review of Economics Global Wealth Inequality Gabriel Zucman1,2 1Department of Economics, University of California, Berkeley, California 94720, USA; email: [email protected] 2National Bureau of Economic Research, Cambridge, MA 02138, USA Annu. Rev. Econ. 2019. 11:109–38 Keywords First published as a Review in Advance on inequality, wealth, tax havens May 13, 2019 The Annual Review of Economics is online at Abstract economics.annualreviews.org This article reviews the recent literature on the dynamics of global wealth https://doi.org/10.1146/annurev-economics- Annu. Rev. Econ. 2019.11:109-138. Downloaded from www.annualreviews.org inequality. I first reconcile available estimates of wealth inequality inthe 080218-025852 United States. Both surveys and tax data show that wealth inequality has in- Access provided by University of California - Berkeley on 08/26/19. For personal use only. Copyright © 2019 by Annual Reviews. creased dramatically since the 1980s, with a top 1% wealth share of approx- All rights reserved imately 40% in 2016 versus 25–30% in the 1980s. Second, I discuss the fast- JEL codes: D31, E21, H26 growing literature on wealth inequality across the world. Evidence points toward a rise in global wealth concentration: For China, Europe, and the United States combined, the top 1% wealth share has increased from 28% in 1980 to 33% today, while the bottom 75% share hovered around 10%. Recent studies, however, may underestimate the level and rise of inequal- ity, as financial globalization makes it increasingly hard to measure wealth at the top.
    [Show full text]
  • Flat Tax: an Overview of the Hall-Rabushka Proposal
    . Flat Tax: An Overview of the Hall-Rabushka Proposal James M. Bickley Specialist in Public Finance November 29, 2011 Congressional Research Service 7-5700 www.crs.gov 98-529 CRS Report for Congress Prepared for Members and Committees of Congress c11173008 . Flat Tax: An Overview of the Hall-Rabushka Proposal Summary The President and leading Members of Congress have stated that fundamental tax reform is a major policy objective for the 112th Congress. The concept of replacing individual and corporate income taxes and estate and gift taxes with a flat rate consumption tax is one option to reform the U.S. tax system. The term “flat tax” is often associated with a proposal formulated by Robert E. Hall and Alvin Rabushka (H-R), two senior fellows at the Hoover Institution. In the 112th Congress, two bills have been introduced that included a flat tax based on the concepts of Hall- Rabushka: the Freedom Flat Tax Act (H.R. 1040) and the Simplified, Manageable, and Responsible Tax Act (S. 820). In addition, Republican presidential candidate Herman Cain has proposed a tax reform plan that includes a modified H-R flat tax. This report analyzes the Hall- Rabushka flat tax concept. Although the current tax structure is referred to as an income tax, it actually contains elements of both an income and a consumption-based tax. A consumption base is neither inherently superior nor inherently inferior to an income base. The combined individual and business taxes proposed by H-R can be viewed as a modified value- added tax (VAT). The individual wage tax would be imposed on wages (and salaries) and pension receipts.
    [Show full text]
  • CURRICULUM VITAE August, 2015
    CURRICULUM VITAE August, 2015 Robert James Shiller Current Position Sterling Professor of Economics Yale University Cowles Foundation for Research in Economics P.O. Box 208281 New Haven, Connecticut 06520-8281 Delivery Address Cowles Foundation for Research in Economics 30 Hillhouse Avenue, Room 11a New Haven, CT 06520 Home Address 201 Everit Street New Haven, CT 06511 Telephone 203-432-3708 Office 203-432-6167 Fax 203-787-2182 Home [email protected] E-mail http://www.econ.yale.edu/~shiller Home Page Date of Birth March 29, 1946, Detroit, Michigan Marital Status Married, two grown children Education 1967 B.A. University of Michigan 1968 S.M. Massachusetts Institute of Technology 1972 Ph.D. Massachusetts Institute of Technology Employment Sterling Professor of Economics, Yale University, 2013- Arthur M. Okun Professor of Economics, Yale University 2008-13 Stanley B. Resor Professor of Economics Yale University 1989-2008 Professor of Economics, Yale University, 1982-, with joint appointment with Yale School of Management 2006-, Professor Adjunct of Law in semesters starting 2006 Visiting Professor, Department of Economics, Massachusetts Institute of Technology, 1981-82. Professor of Economics, University of Pennsylvania, and Professor of Finance, The Wharton School, 1981-82. Visitor, National Bureau of Economic Research, Cambridge, Massachusetts, and Visiting Scholar, Department of Economics, Harvard University, 1980-81. Associate Professor, Department of Economics, University of Pennsylvania, 1974-81. 1 Research Fellow, National Bureau of Economic Research, Research Center for Economics and Management Science, Cambridge; and Visiting Scholar, Department of Economics, Massachusetts Institute of Technology, 1974-75. Assistant Professor, Department of Economics, University of Minnesota, 1972-74.
    [Show full text]
  • Turnover in the Labor Force
    ROBERT E. HALL* MassachusettsInstitute of Technology Turnover in the Labor Force EVERY MONTH, AN IMPORTANT FRACTION of the populationmoves from one economicactivity to another:Some are laid off and mustseek work, or they quit to take newjobs; young people leave school and look for work; workersleave the labor force becauseof disabilityor duties at home. The continualprocess of turnoverseems to be the characteristicof the modern Americaneconomy that distinguishesit from those of other developed countries,where the experienceof individualworkers appears to be much more stableover time. Is high turnoverinevitable in a postindustrialecon- omy?How do the variousdemographic groups in the laborforce differ with respectto turnover?What is the relationbetween turnover and unemploy- ment?What are the social benefitsand costs of turnoverand unemploy- ment?These are some of the criticalquestions that I addressin this paper. Any moderntreatment of turnoverand unemploymentmust distinguish betweenthe role of eventsoutside the controlof the individualand the role of his responseto his economicenvironment. Fluctuations in the demand for labor are the most importantexternal source of disturbancesin an in- dividual'scareer, so it is conventionalto distinguishbetween the demand side of the problemand the supplyside. Turnover among jobs wasthe tradi- tional explanationof the frictionalunemployment that exists to some ex- tent in everyeconomy, but until recently,it receivedlittle discussion.Even ten yearsago, economistsconsidered unemployment a simpleshortage of * I am gratefulto Zvi Body, RichardKasten, Meir Kohn, and Steven Shavellfor able assistance.This researchwas supportedby the National Science Foundation. 709 710 Brookings Papers on Economic Activity, 3:1972 jobs, withoutasking how the distributionof the laborforce among the jobs changesfrom month to month. The federalgovernment's accidental experimentation with a high-pres- sure economy startingin 1965 broughtabout two importantshifts in the thinkingof economistsabout unemployment.
    [Show full text]
  • Mario Crucini
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Jones, Charles I. Article Life and growth NBER Reporter Provided in Cooperation with: National Bureau of Economic Research (NBER), Cambridge, Mass. Suggested Citation: Jones, Charles I. (2013) : Life and growth, NBER Reporter, National Bureau of Economic Research (NBER), Cambridge, MA, Iss. 2, pp. 17-19 This Version is available at: http://hdl.handle.net/10419/103247 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Life and Growth Charles I. Jones* During the twentieth century, life functions — of the kind that economists After all, some new technologies save expectancy in the United States rose use to study asset pricing, the labor-lei- lives — new vaccines, new surgical tech- from less than 50 years to 77 years, sure tradeoff, and macroeconomic fluc- niques, anti-lock brakes, and pollution while average incomes rose by about tuations — already contain a key ingredi- scrubbers.
    [Show full text]
  • The Time Series Consumption Function Revisited
    ALAN S. BLINDER Brookings Institution and Princeton University ANGUS DEATON Princeton University The Time Series Consumption Function Revisited THERELATIONSHIP between consumer spending and income is one of the oldest statistical regularitiesof macroeconomics-and one of the stur- diest. Like the aging movie star, it needs a little touching up now and again, but always seems to come bouncingback. A dozen yearsago, boththe theoreticalderivation and the econometric form of the aggregateconsumption function were considered settled. Most economists adheredto one of two ways of puttingFisher's theory of intertemporaloptimization into operation: Milton Friedman's per- manent income hypothesis (henceforth, PIH) or Franco Modigliani's life-cycle hypothesis (henceforth,LCH). ' Since each variantseemed to have sound theoretical underpinnings,and since the two had similar econometricforms that explainedthe data well and had similarimplica- tions for policy, there was not a greatdeal to quarrelabout. Perhapsthe most contentious empirical issue was the apparently large marginal This paperhas benefitedfrom the commentsand suggestionsof AlbertAndo, Whitney Newey, and members of the Brookings Panel and from seminar presentationsat the Universityof Warwick,Princeton University, and Johns Hopkins University.We thank Peter Rathjensand Lori Gruninfor researchassistance and the National Science Foun- dationfor financialsupport. 1. Milton Friedman, A Theory of the Consumption Function (Princeton University Press, 1957); Franco Modigliani and Richard Brumberg,
    [Show full text]
  • Massachusetts Institute of Technology Department of Economics Working Paper Series
    Massachusetts Institute of Technology Department of Economics Working Paper Series The Rise and Fall of Economic History at MIT Peter Temin Working Paper 13-11 June 5, 2013 Rev: December 9, 2013 Room E52-251 50 Memorial Drive Cambridge, MA 02142 This paper can be downloaded without charge from the Social Science Research Network Paper Collection at http://ssrn.com/abstract=2274908 The Rise and Fall of Economic History at MIT Peter Temin MIT Abstract This paper recalls the unity of economics and history at MIT before the Second World War, and their divergence thereafter. Economic history at MIT reached its peak in the 1970s with three teachers of the subject to graduates and undergraduates alike. It declined until economic history vanished both from the faculty and the graduate program around 2010. The cost of this decline to current education and scholarship is suggested at the end of the narrative. Key words: economic history, MIT economics, Kindleberger, Domar, Costa, Acemoglu JEL codes: B250, N12 Author contact: [email protected] 1 The Rise and Fall of Economic History at MIT Peter Temin This paper tells the story of economic history at MIT during the twentieth century, even though roughly half the century precedes the formation of the MIT Economics Department. Economic history was central in the development of economics at the start of the century, but it lost its primary position rapidly after the Second World War, disappearing entirely a decade after the end of the twentieth century. I taught economic history to MIT graduate students in economics for 45 years during this long decline, and my account consequently contains an autobiographical bias.
    [Show full text]
  • Improvements in Macroeconomic Stability: the Role of Wages and Prices
    This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: The American Business Cycle: Continuity and Change Volume Author/Editor: Robert J. Gordon, ed. Volume Publisher: University of Chicago Press Volume ISBN: 0-226-30452-3 Volume URL: http://www.nber.org/books/gord86-1 Publication Date: 1986 Chapter Title: Improvements in Macroeconomic Stability: The Role of Wages and Prices Chapter Author: John B. Taylor Chapter URL: http://www.nber.org/chapters/c10033 Chapter pages in book: (p. 639 - 678) 11 Improvements in Macroeconomic Stability: The Role of Wages and Prices John B. Taylor Macroeconomic fluctuations have been less severe in the past thirty years than in the period before World War II. Although the recessions in the 1970s and 1980s have been large and have been associated with big swings in inflation, the average amplitude of cyclical fluctuations is still smaller than in the prewar period. This improvement in macroeconomic performance was already ev- ident to most economists by the end ofthe 1950s. It served as the focal point of Arthur Bums's 1959 presidential address before the American Economic Association. Bums contrasted the milder postwar fluctua- tions with those he studied with Wesley Clair Mitchell at the National Bureau of Economic Research. He attributed the improvement to countercyclical fiscal and monetary policy as well as to structural changes in the economy: more stable corporate dividends, steadier employment practices, better inventory controls, and greater financial stability ow- ing to deposit insurance. The improvement in economic performance still deserves the atten- tion of macroeconomists.
    [Show full text]
  • Land As a Distinctive Factor of Production Mason Gaffney
    Land as a Distinctive Factor of Production Mason Gaffney e classical economists treated land as distinct from capital: "land, labour and capital" were the three basic "factors of production". They were mutually exclusive. They were comprehensive, including all economic agents. Each was also "limitational," meaning at least some of each was needed for all economic activity (v. A- 9, below)" They made a coherent system. Neo-classical economists denied the distinction and undertook to purge land from economese. Many of them, following John B. Clark and Frank Knight, still deny the distinction as I explain in The Corruption of Economics, a companion volume in this series. Many treat the matter by seizing on and stressing all similarities of land and capital, while ignoring all differences. Some invent gray areas that seem to fuse land and capital, present them as typical, and quickly move on. Many more simply ignore land, which has the effect of accepting the Clark-Knight verdict in practice. Others uneasily finesse and blur the issue by writing "land" in quotes, or trivializing its value, or referring vaguely to "quasi-rents" to comprehend a broad spectrum of incomes both from land and other factors. Whatever possessed the neo-classicals to leave such a mess? One needs to know something of their times and politics. J.B. Clark and E.R.A. Seligman of Columbia University were obsessed with deflecting proposals, strongly supported at the time and place they wrote, to focus taxation on land. Henry George, after all, was nearly elected Mayor of New York City in 1886 and 1897.
    [Show full text]
  • Chapter 18: the Markets for the Factors of Production Principles of Economics, 8Th Edition N
    Chapter 18: The Markets for the Factors of Production Principles of Economics, 8th Edition N. Gregory Mankiw Page 1 1. Introduction a. Why do people have different earnings? i. While it is popular to view earnings as being just fate (aren’t we all victims) or discrimination, supply and demand has a significant influence. ii. Education is important because it increases productivity (and as we will see demand), but it also tends to limit the supply in any category of labor. (1) No surprise, education tends to lead to a higher income. iii. Three fourths of national income is paid in the form of wages and fringe benefits. (1) Much to the rest is a result to savings from wages. iv. The demand for the factors of production is a derived demand. v. The factors of production are the inputs used to produce goods and services. P. 362. (1) Tradition has divided the factors of production into land, labor and capital, although their description is much more complicated than that. vi. This chapter only deals with competitive firms. 2. The Demand for Labor a. Labor markets are different from most other markets because labor demand is a derived demand. b. Figure 1: The Versatility of Supply and Demand. P. 363. c. The Competitive Profit Maximizing Firm i. Two assumptions: (1) There is competition in both the product and input markets. (2) The firm is a profit maximizer. ii. The Production Function and the Marginal Product of Labor (1) Table 1: How the Competitive Firm Decides How Much Labor to Hire.
    [Show full text]
  • Alternative Responses of Policy to External Supply Shocks
    ROBERT J. GORDON NorthwesternUniversity Alternative Responses of Policy to External Supply Shocks DURING 1973 and 1974 reductionsin suppliesof food (throughnatural causes)and of oil (throughunnatural causes) simultaneously lowered the real incomeof U.S. nonfarmworkers and raisedthe rate of inflation.An inflation-cum-recessioninduced by lowersupplies of rawmaterials may call for a policyresponse different from the traditionaltonic of demandrestric- tion calledfor by a "garden-variety"inflation generated by excessdemand. In lightof the noveltyof the 1974situation, the sharpdivergence of policy recommendationsamong economists is not surprising.Some analyzedthe episodewithin the context of standardmacroeconomic demand analysis, treatingthe 1973-74acceleration of inflationas a delayedconsequence of the accelerationin monetarygrowth during 1972, and the 1974-75recession as a delayedconsequence of the sharpdeceleration in monetarygrowth that beganin June 1974.The policy advice of this group, consistinglargely of economistsgenerally identified as "monetarists,"was to maintaina con- stantor even slightlyreduced rate of growthof the moneysupply.' Arthur Note: This paper was supportedby National Science Foundation Grant GS-39701. It was inspired,as was a previous paper in another area, as an attempt to reconcilethe views of Milton Friedman and Arthur Okun. I am grateful to Michael Parkin and participantsin the Brookingspanel for helpful suggestions. 1. See Allan Meltzer,"A Plan for SubduingInflation" (a dialoguebetween Allan H. Meltzerand two editorialstaff
    [Show full text]