Foundations of Real-World Economics

Höfundur: John Komlos (Útgáfa: 3)
Foundations of Real-World Economics

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The 2008 financial crisis, the rise of Trumpism, and the other populist movements which have followed in their wake have grown out of the frustrations of those hurt by the economic policies advocated by conventional economists for generations. Despite this, textbooks remain frozen in time, continuing to uphold traditional policies as though nothing has happened. Foundations of Real-World Economics demonstrates how misleading it can be to apply oversimplified models of perfect competition to the real world.

The math works well on college blackboards but not so well on the Main Streets of America. This volume explores the realities of oligopolies, the real impact of the minimum wage, the double-edged sword of free trade, and other ways in which powerful institutions cause distortions in mainstream models. Bringing together the work of key scholars like Kahneman, Minsky, and Schumpeter, this textbook takes into consideration the inefficiencies that arise when the perfectly competitive model is applied to the real world dominated by multinational oligopolies.

The third edition has been updated throughout, bringing in new material on the financial crises, the rise of populism, racism, inequality, climate change, and the Covid-19 pandemic. A must-have for students studying the principles of economics as well as micro- and macroeconomics, this textbook redresses the existing imbalance in economic teaching as John Komlos focuses on the paradigm of humanistic economics.

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Útgefandi
Taylor & Francis
ISBN
9781000847895
Print ISBN
9781032004846
Format
ePub
Útgáfa
3
Höfundar
John Komlos
Tungumál
English
Útgefið
2023-03-20
Prent takmörkun á líftíma
100
Prent takmörkun
2
Afritunar takmörkun
2

Kaflar

  • Cover
  • Endorsements
  • Half Title
  • Title Page
  • Copyright Page
  • Table of Contents
  • List of Figures
  • List of Tables
  • List of Illustrations
  • Preface to the Third Edition
  • 1 Welcome to Real-World Economics
  • 1.1 My Credo: It’s Not the Economy—It’s How People Feel in the Economy!
  • 1.2 Humanistic Economics, the New Paradigm
  • 1.3 A Primer on Blackboard Economics
  • 1.4 A Paradigm Shift Is Long Overdue
  • 1.5 Real-World Economics Is Superior
  • 1.6 Simple Is for the Simple-Minded
  • 1.7 “It’s Only a Model!” Is Deceiving
  • 1.8 Takeaways
  • Questions for Discussion
  • Notes
  • 2 The Evidence: Markets Are Neither Omniscient Nor Omnipotent
  • 2.1 Markets Are Not Created by Divine Power
  • 2.2 Running the Economy “Hot”
  • 2.3 The Downside of a High-Pressure Capitalism
  • 2.4 Decline in Life Expectancy Reveals the Diminution of the Quality of Life
  • 2.5 Markets Have Numerous Limitations
  • 2.6 The “Achilles’ Heel” of Markets
  • 2.7 The Best Government Is Not the One That Governs Least
  • 2.8 Morality Should Take Precedence over Markets
  • 2.9 Economics Is a Social Science, Not a Natural Science
  • 2.10 Ideology Is Unavoidable and Pervasive in Economics
  • 2.11 Takeaways
  • Questions for Discussion
  • Notes
  • 3 The Nature of Demand
  • 3.1 The Post-Scarcity Economy
  • 3.2 Tastes Are Endogenous, Contrary to Conventional Assumptions
  • 3.3 Basic Needs Should Have Priority
  • 3.4 The Invisible Hand Is Often Invisible Because It Is Not There
  • 3.5 The Magic of Competition Is Not an Elixir
  • 3.6 Consumerism Was Not Our Choice
  • 3.7 The Market Has Hidden Magnification Mechanisms
  • 3.8 Variations in Cognitive Endowment
  • 3.9 Genetic Endowment Influences Human Behavior
  • 3.10 Neuroeconomics Discovers Some Economic Secrets
  • 3.11 Takeaways
  • Questions for Discussion
  • Notes
  • 4 Homo Oeconomicus Is Extinct: The Foundations of Behavioral Economics
  • 4.1 Utility Maximization Is Anachronistic Economics
  • 4.2 Optimization Is Impossible for Humans
  • 4.3 The Imperfections of the Human Brain
  • 4.4 Bounded Rationality Should Be the Default Model
  • 4.5 Satisficing Is More Realistic than Optimizing
  • 4.6 Biases and Wonders of Intuition
  • 4.7 Heuristics Help Avoid Becoming Catatonic
  • 4.8 Three Biases of the Human Mind: Framing, Accessibility, and Anchoring
  • 4.9 The Utility Function Is Reference-Dependent
  • 4.10 Prospect Theory Is the Future Foundation of Economics
  • 4.11 Behavioral Economics Opens Up New Vistas
  • 4.12 Takeaways
  • Questions for Discussion
  • Notes
  • 5 Taste-Makers and Consumption
  • 5.1 Interdependent Utility Function Should Be the Default Model
  • 5.2 The Economy Is Embedded in a Society
  • 5.3 The Culture Industry Has a Crucial Economic Function
  • 5.4 The Ascendency of Impatience
  • 5.5 The Determination of Fairness Ought Not to Be Delegated to Markets
  • 5.6 Justice Is More Important than Efficiency
  • 5.7 The Rawlsian Just Economy
  • 5.8 We Are Not Completely Selfish
  • 5.9 The Distinction Between Positive and Normative Economics Is a False Dichotomy
  • 5.10 Expected Utility vs. Realized Utility
  • 5.11 Imperfect Information Is Ubiquitous and Crucial to Understanding the Real Economy
  • 5.12 Signaling in Case of Imperfect Information
  • 5.13 Time-Inconsistent Preferences
  • 5.14 Takeaways
  • Questions for Discussion
  • Notes
  • 6 Oligopolies and Imperfect Competition
  • 6.1 Multinationals Instead of Mom-and-Pop Operations
  • 6.2 The Illusion of Perfect Competition
  • 6.3 Imperfect Competition: Oligopolies, and Monopolies
  • 6.4 Prices Are Signals
  • 6.5 Disequilibrium Is the Norm
  • 6.6 Adverse Selection Is an Information Problem
  • 6.7 Theories of Strategic Behavior
  • 6.8 The Influence of Corporate Power: Economic, Political, and Social
  • 6.9 Takeaways
  • Questions for Discussion
  • Notes
  • 7 Returns to the Factors of Production
  • 7.1 Marginal Theory of Everything
  • 7.2 Labor Compensation Lags Far Behind Productivity: The Steady Ascent of the Ominous Wage Gap
  • 7.3 Earnings of Physical Capital
  • 7.4 Human Capital in the Information Revolution
  • 7.5 Other Forms of Intangible Capital
  • 7.6 Institutions as Capital
  • 7.7 Profit Rules
  • 7.8 The Troubling Decline in Labor’s Share of GDP
  • 7.9 Natural Resources Are Finite and Important
  • 7.10 Poverty vs Affluence: The Stupendous Rise in Inequality
  • 7.11 The Second Gilded Age of High Tech, High Finance, and Celebrities
  • 7.12 Exorbitant Incomes Exacerbate Inequality
  • 7.13 Welfare Does Not Grow at the Same Rate as the Economy
  • 7.14 Relative Incomes Matter Most in Developed Societies
  • 7.15 Ethics and the Skewed Distribution of Income
  • 7.16 Takeaways
  • Questions for Discussion
  • Notes
  • 8 The Case for Oversight, Regulation, and Management of Markets
  • 8.1 Market Failure Is Ubiquitous and Ominous
  • 8.2 The Principal-Agent Quandary
  • 8.3 Moral Hazard Disrupts the Efficient Market Hypothesis
  • 8.4 Transaction Costs Increase the True Price of a Product
  • 8.5 Opportunistic Behavior Leads to Suboptimal Allocation
  • 8.6 Regulatory Capture Is a Consequence of Rampant Inequality
  • 8.7 Regulation in the Public Interest Is Essential
  • 8.8 Morality Should Not Be Delegated to Markets
  • 8.9 Exploitation Is Detrimental to the Social Fabric
  • 8.10 Time and Space
  • 8.11 Path Dependence or Sequential Decisions
  • 8.12 Limits and Standards
  • 8.13 Takeaways
  • Questions for Discussion
  • Notes
  • 9 Microeconomic Applications On and Off the Blackboard
  • 9.1 Minimum Wage Is Good for Workers and Good for the Economy
  • 9.2 Price Controls Can Also Help
  • 9.3 Monopsony: Bargaining Power of Firms in the Labor Market
  • 9.4 Unions and Countervailing Power
  • 9.5 The American Medical Association Is a Harmful Cartel
  • 9.6 Redistribution Would Help
  • 9.7 Takeaways
  • Questions for Discussion
  • Notes
  • 10 What Is Macroeconomics?
  • 10.1 Keynes, the Savior of Capitalism
  • 10.2 Keynesian Fiscal Policy, the Steering Wheel of the Economy
  • 10.3 Monetary Policy Is Also Essential
  • 10.4 The Liquidity Trap Renders Monetary Policy Ineffective
  • 10.5 Neoclassical Synthesis Was an Uneasy Compromise with Keynesianism
  • 10.6 The Monetarist Counterrevolution
  • 10.7 “Poor, Poor, Pitiful Macroeconomists”
  • 10.8 Bailout Capitalism’s Modern Monetary Theory
  • 10.9 The Production Possibilities Frontier
  • 10.10 GDP Is a Misleading Measure of Welfare
  • 10.11 Takeaways
  • Questions for Discussion
  • Notes
  • 11 Macroeconomics Part II
  • 11.1 Finagling with the Unemployment Numbers
  • 11.2 The Natural Rate of Unemployment Is Not Natural at All
  • 11.3 Economic Growth: When Is Enough?
  • 11.4 Growth Has Not Increased Life Satisfaction
  • 11.5 Technological Change Is a Double-Edged Sword
  • 11.6 Social and Economic Mobility
  • 11.7 Complex Economies Evolve in Perpetual Disequilibrium
  • 11.8 Missing Markets Are an Existential Threat
  • 11.9 “There Is No Planet B”
  • 11.10 Feminist Economics: If Women Counted
  • 11.11 Takeaways
  • Questions for Discussion
  • Notes
  • 12 Macroeconomics Part III
  • 12.1 The Government Is an Integral Part of the Economy
  • 12.2 The Challenges of Keynesian Fiscal Policy
  • 12.3 Crowding Out Private Investment
  • 12.4 The Ominous US National Debt
  • 12.5 Taxes Are Good for Us
  • 12.6 Trickle-Down Economics Is Bogus
  • 12.7 The Scarcity of Savings
  • 12.8 Wealth: the “Poor Ain’t Got None”
  • 12.9 Inflation and Deflation
  • 12.10 The New Wave of Industrial Policy
  • 12.11 Takeaways
  • Questions for Discussion
  • Notes
  • 13 The Tsunami of Globalization
  • 13.1 The Theory of Comparative Advantage
  • 13.2 The Effects of Tariffs on Welfare Are Complicated by Unemployment
  • 13.3 Free Trade Is Not an Engine of Growth
  • 13.4 Protection of Infant Industries
  • 13.5 Unbalanced Trade Generates the Anguish of Unemployment
  • 13.6 Import Certificates Could Eliminate the Trade Deficits
  • 13.7 New Trade Theory
  • 13.8 Takeaways
  • Questions for Discussion
  • Notes
  • 14 The Financial Crisis of 2008
  • 14.1 Preliminaries
  • 14.2 The End of Boring Banking
  • 14.3 Double Trouble: Greenspan’s Bubble
  • 14.4 Greenspan Saw Nothing, Bernanke Heard Nothing, and the Fed Said Nothing
  • 14.5 The Minsky Moment: The Meltdown of 2008
  • 14.6 Thirty-Two Causes of the Meltdown
  • 14.7 Bailout Capitalism: The Crisis Obama Wasted
  • 14.8 Obama’s Tepid Stimulus
  • 14.9 Nationalization of the Too-Big-To-Fail Banks as Pre-Privatization
  • 14.10 Takeaways
  • Questions for Discussion
  • Notes
  • 15 Economists’ Mistakes Lead to Right-Wing Populism Plus an Insurrection
  • 15.1 Four Tsunamis Pave the Path to Populism
  • 15.2 “It’s the Economy, Stupid”
  • 15.3 Reaganomics Was the Gamechanger
  • 15.4 The Destructive Forces of Globalization Amplified Reagan’s Mistakes
  • 15.5 After Reagan, Bush Sr., Clinton, and Bush Jr., Obama Adds Fuel to the Fire
  • 15.6 From Reagan to Trump in One Generation
  • 15.7 Takeaways
  • Questions for Discussion
  • Notes
  • 16 Hidden Racist Elements in Blackboard Economics
  • 16.1 Introduction to Covert Racism
  • 16.2 The Descendants of Slaves Are Still at the Bottom of the Totem Pole
  • 16.3 Alice-in-Wonderland Discrimination in Economic Theory
  • 16.4 The Achilles’ Heels of Real-Existing Markets Disadvantage Minorities
  • 16.5 Time to Purge the Curse of Systemic Racism from Economics
  • 16.6 Takeaways
  • Questions for Discussion
  • Notes
  • 17 The Covid-19 Pandemic Exposed the Need for a Black-Swan-Robust Economy
  • 17.1 An Economy in Disequilibrium Is Vulnerable
  • 17.2 The Economic Crisis
  • 17.3 Bailout Capitalism to the Rescue
  • 17.4 The Goal of a Black-Swan-Robust Economy
  • 17.5 Covid-19 Exposed the Deep Fissures, Endemic Imbalances, and Precarious Nature of the US Economy
  • 17.6 Takeaways
  • Questions for Discussion
  • Notes
  • 18 Conclusion: Toward a Capitalism with a Human Face
  • 18.1 Summing Up: Imaginary vs. Real Markets
  • 18.2 Eight Inconvenient Truths about a Dual Economy
  • 18.3 The Gordian Knot: The US Economy Is Facing 16 Headwinds, Only One of Them Is Partly Fixable
  • 18.4 Takeaways
  • Questions for Discussion
  • Notes
  • Index