The Concise Encyclopedia of Economics
FEATURED ARTICLE

European Union

Marian L. Tupy

The origins of the EU are usually traced to the European Coal and Steel Community (1952). Heavily regulated coal and steel industries of Germany and France were to be administered by a supranational authority. Economic benefits of supranational control over one sector of the economy were expected to lead to demands for supranational management of other economic sectors. But supranationalism, characterized by bureaucratic planning and regulation, could not produce economic growth....

... The EU's redistributive policies will likely produce more negative-sum outcomes, discontentment, and tensions. The success of the European project may, therefore, lie in embracing a "voluntarist" Europe where individual states, businesses, and persons will be free to choose the nature and extent of their cooperation....

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NEW ARTICLE

Division of Labor

Michael Munger

Division of labor combines specialization and the partition of a complex production task into several, or many, sub-tasks. Its importance in economics lies in the fact that a given number of workers can produce far more output using division of labor compared to the same number of workers each working alone. Interestingly, this is true even if those working alone are expert artisans. The production increase has several causes. According to Adam Smith, these include increased dexterity from learning, innovations in tool design and use as the steps are defined more clearly, and savings in wasted motion changing from one task to another....

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ALSO OF INTEREST

Gary Becker

Biography.

Public Choice

William F. Shughart II

Immigration

George J. Borjas

Health Care

Michael A. Morrisey

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FEATURED BIOGRAPHY

Robert W. Fogel

(1926-2013)

Robert Fogel was corecipient (with Douglass C. North) of the 1993 Nobel Prize in economics "for having renewed research in economic history by applying economic theory and quantitative methods in order to explain economic and institutional change."...

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FEATURED BIOGRAPHY

Gerard Debreu

(1921-2004)

Gerard Debreu's contributions are in general equilibrium theory--highly abstract theory about whether and how each market reaches equilibrium. In a famous paper coauthored with Kenneth Arrow and published in 1954, Debreu proved that under fairly unrestrictive assumptions, prices exist that bring markets into equilibrium. In his 1959 book, The Theory of Value, Debreu introduced more general equilibrium theory, using complex analytic tools from mathematics--set theory and topology--to prove his theorems. In 1983 Debreu was awarded the Nobel Prize "for having incorporated new analytical methods into economic theory and for his rigorous reformulation of the theory of general equilibrium."...

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