The Concise Encyclopedia of Economics
FEATURED TOPIC

Education

Linda Gorman

In the 1980s, economists puzzled by a decline in the growth of U.S. productivity realized that American schools had taken a dramatic turn for the worse. After rising every year for fifty years, student scores on a variety of achievement tests dropped sharply in 1967. They continued to decline through 1980. The decline was so severe, John Bishop calculates, that students graduating in 1980 had learned "about 1.25 grade-level equivalents less than those who graduated in 1967."...

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ALSO OF INTEREST

Energy

Jerry Taylor and Peter Van Doren

Economic Freedom

Robert A. Lawson

Immigration

George J. Borjas

Public Choice

William F. Shughart II

Health Care

Michael A. Morrisey

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FEATURED BIOGRAPHY

W. Arthur Lewis

(1915-1991)

In 1979, British citizen W. Arthur Lewis was awarded the Nobel Prize, along with Theodore Schultz, for "pioneering research into economic development ... with particular consideration of the problems of developing countries." One of Lewis's major contributions to economics is a 1954 article that discusses his concept of a "dual economy" in a poor country. According to Lewis a poor country's economy can be thought of as containing two sectors, a small "capitalist" sector and a very large "traditional" (agricultural) sector. Employers in the capitalist sector hire people to make money. Employers in the traditional sector, on the other hand, are not profit maximizing and, therefore, hire too many people so that their productivity is very low....

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