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.
Positive externalities are benefits that are infeasible to charge to provide; negative externalities are costs that are infeasible to charge to not provide. Ordinarily, as Adam Smith explained, selfishness leads markets to produce whatever people want; to get rich, you have to sell what the public is eager to buy. Externalities undermine the social benefits […]
What Are Bubbles? In 1996, the fledgling Internet portal Yahoo.com made its stock-market debut. This was during a time of great excitement—as well as uncertainty—about the prosperous “new economy” that the rapidly expanding Internet promised. By the beginning of the year 2000, Yahoo shares were trading at $240 each.1 Exactly one year later, however, Yahoo’s […]
Telecommunications matters economically for two reasons. First, it plays a role perhaps second only to brain power in the operation and rapidly expanding productivity of the modern “information-based” economy; indeed, it supplies a primary technical means for productively harnessing the information and knowledge spread among individual economic actors throughout the global economic order. Second, the […]
A patent is the government grant of monopoly on an invention for a limited amount of time. Patents in the United States are granted for seventeen years from the date the patent is issued or for 20 years from the date of filing. Other countries grant patents for similar time periods. Italy and Mexico grant […]
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.
Finn Kydland, along with edward prescott, received the 2004 Nobel Prize in economic science “for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles.” Because Kyland and Prescott worked so closely, this biography deals with their work on time consistency and Prescott’s biography deals with […]
Robert Solow was awarded the Nobel Prize in 1987 “for his contributions to the theory of economic growth.” His first major paper on growth was “A Contribution to the Theory of Growth.” In it he presented a mathematical model of growth that was a version of the Harrod-Domar growth model (see roy f. harrod). The […]