Economic Analysis in Historical Perspective

1 Introduction


2 Monetary Economics


2.1 Introduction


2.2 The Concept of Money


2.2.1 Money Definitions and Their Rationale


2.2.2 Money and Credit


2.2.3 Deposits as Money


2.3 The Demand for Money


2.3.1 Velocity of Circulation


2.3.2 The Demand for Balances


2.3.3 Elasticity of Demand for Balances


2.4 The Supply of Money


2.4.1 Supply-Determination


2.4.2 Demand-Determination


2.5 Monetary Control


2.5.1 Monetary Control and the Bank Charter


2.5.2 Monetary Control after 1870


2.6 The Rate of Interest


2.6.1 Foundations of Interest Theory


2.6.2 Marshall and his Successors


2.6.3 An Independent Tradition


2.7 Transmission Mechanisms and the Effects of Money


2.7.1 Classical Transmission


2.7.2 The Credit Cycle


2.7.3 Expectations


2.7.4 Effective Demand


2.7.5 Rigidities


2.7.6 Savings and Investment


2.7.7 Targets and Indicators


2.8 Conclusion

Notes

References


3 Welfare Economics


3.1 Introduction


3.1.1 The Nature of welfare Economics


3.1.2 Welfare Economics and Value Judgments


3.1.3 The Plan of the Chapter


3.2 Welfare Economics in the Classical Paradigm


3.3 Post-Classical Developments in Welfare Economics


3.3.1 Utility Theory: the Beginnings


3.3.2 Consumers' Surplus and its Applications


3.3.3 Measurement Problems in Early welfare Analysis


3.3.4 Monopoly, Price Discrimination and Marginal-Cost Pricing


3.4 Modern Issues in Welfare Economics


3.4.1 Origins: the Paretian Value Judgments


3.4.2 The Necessary Conditions for Pareto Optimality


3.4.3 Compensation Criteria


3.4.4 Social Welfare Functions


3.4.5 Market Failure


3.5 The Present Condition and Future Prospects of Welfare Economics


3.5.1 The Politics of Social Choice


3.5.2 Persistent Problems


3.5.3 Future Prospects

Notes

References


4 Public Finance


4.1 Introduction


4.1.1 Government Control of Appropriations


4.1.2 Public Finance in the Monetary Economy


4.1.3 Public Finance and Statistics


4.2 Public Expenditure


4.2.1 British Classical Views


4.2.2 The Voluntary Exchange Approach


4.2.3 The Modern Theory of Public Goods


4.2.4 Positive Theories of Public Expenditure


4.3 Personal Taxation


4.3.1 Some Recurrent Issues


4.3.2 Differentiation and the Treatment of Savings


4.3.3 The Concept of Income


4.3.4 Progression and Optimal Income Taxation


4.4 Indirect Taxation


4.4.1 Welfare Losses: Direct versus Indirect Taxation


4.4.2 'Second-Best' Taxation


4.5 Income Redistribution


4.5.1 Alternative Approaches


4.5.2 The Incidence of Taxes


4.5.3 The Measurement of Redistribution


4.6 Conclusions

Notes

References


5 Oligopoly and the Theory of the Firm


5.1 Introduction


5.2 Historical Background


5.2.1 Marshall


5.2.2 Duopoly


5.2.3 Perfect Competition


5.2.4 Monopoly and Imperfect Competition


5.3 Monopolistic Competition


5.3.1 Origins of the Theory


5.3.2 The Small Group


5.3.3 Technical Implications


5.4 Post-Chamberlinian Developments


5.4.1 The Kinked Demand Curve


5.4.2 Entry and Potential Competition


5.4.3 Collusion


5.4.4 Oligopoly and Managerial Theories


5.5 Some Problems in the Analysis of Oligopoly


5.5.1 Oligopoly, Perfect Competition and Information


5.5.2 Price Competition and Oligopoly


5.5.3 Oligopoly, Managerial Theories and the Growth of the Firm


5.5.4 Contestable Markets

Notes

References


6 Economic Statistics and Econometrics


6.1 Introduction


6.1.1 The Need for Quantitative Information


6.1.2 Statistics: Data and Methods


6.1.3 Mathematics, Statistics and Econometrics


6.2 Data Collection and Description


6.2.1 The Foundations of Political Arithmetic


6.2.2 The Eighteenth Century


6.2.3 The Nineteenth-Century Statistical Movement


6.2.4 The Statistical Society of London


6.3 Statistics and Probability


6.3.1 The Calculus of Probabilities


6.3.2 The Theory of Errors


6.3.3 The Bayesian Approach


6.4 Inference and Hypothesis Testing


6.4.1 Use of the Theory of Errors in Economics


6.4.2 Research in Biometrics


6.4 3 Sampling Theory


6.4.4 Sampling Technique


6.4.5 The Confidence Interval


6.5 Early Econometric Studies


6.5.1 The Identification Problem


6.5.2 Error Specification


6.5.3 Ordinary Least Squares


6.5.4 The Probability Approach


6.6 Development of Econometric Theory


6.6.1 Single-Equation Models


6.6.2 Simultaneous-Equation Models


6.7 Conclusions

Notes

References


7 Balance of Payments


7.1 Introduction


7.2 From Locke to Smith


7.2.1 Locke


7.2.2 Gervaise


7.2.3 Cantillon


7.2.4 Hume


7.2.5 Harris


7.2.6 Smith


7.3 From Thornton to Ricardo


7.3.1 Baring and Boyd


7.3.2 Thornton


7.3.3 King


7.3.4 Foster


7.3.5 James Mill


7.3.6 Ricardo (1810)


7.3.7 Horner and the Bullion Report


7.3.8 Huskisson


7.3.9 Ricardo (1811a)


7.3.10 Malthus


7.3.11 Ricardo (1811b)


7.4 Conclusion

Notes

References

Index