Economics for Business: Competition, Macro-Stability and Globalisation

Economics for Business Focuses on three essential branches of modern economics: competition and the market system, macroeconomics, and the economics of openness and globalisation including the analysis of international trade, foreign investment and exchange rates. The book has a very strong business focus and has been used in the UK on many MBA courses as well as short, often one semester undergrad. business economics courses. The book examines economics from a business perspective and is selective in its coverage, focusing on setting out the big picture and including topics on the basis that they throw light on issues relevant to business. It has a policy perspective which puts theory of the firm, strategy and macroeconomic issues in a policy context which helps students see the relevance of the theory. The book does cover macroeconomics, as appropriate for business students, and looks at globalisation, trade liberalisation, economic integration, exchange rates, etc. The selective, thematic, policy oriented approach makes this book appropriate for MBA and post-experience students, as well as for undergrads.

Table of Contents:
Preface to the third edition Acknowledgements 1 The economic policy consensus 1 Introduction 1.1 The economic policy consensus 2 1.2 Why policy changed 1.3 Implications for the future 1.4 Criticisms of the new consensus 1.5 Will the consensus last? Summary Questions for discussion Exercises Further reading 2 What makes nations grow? Introduction 2.1 Trends in economic growth 2.2 Growth theories 2.3 Human welfare and sustainable growth 2.4 Policy prescriptions for growth 2.5 Conclusions Summary Questions for discussion Exercises Further reading Appendix 2.1: The economics of the new economy Part I The market system and competition 3 The market system in action Introduction 3.1 The market system 3.2 The role of prices 3.3 Movements in demand and supply 3.4 The role of traders and arbitrage 3.5 The efficiency of the market system 3.6 The free market system in social context 3.7 Conclusions Summary Questions for discussion Exercises Further reading 4 Market demand and the pricing decision Introduction 4.1 What is a ‘rational’ consumer? 4.2 Deriving the market demand curve 4.3 Elasticities of demand 4.4 Estimating the demand function 4.5 Price elasticities and the pricing decision 4.6 Conclusions Summary Questions for discussion Exercises Further reading 5 The firm in a competitive market Introduction 5.1 Profit maximisation 5.2 Rules for maximising profit 5.3 Cost structure of the firm 5.4 The transaction costs approach 5.5 From cost structure to supply curve 5.6 Conclusions Summary Questions for discussion Exercises Further reading 6 The economics of market power Introduction 6.1 Firm size 6.2 The economics of market power 6.3 How to sustain monopoly power 6.4 Market power with few firms – the case of oligopoly 6.5 Conclusions Summary Questions for discussion Exercises Further reading Case study 6.1: The diamond cartel 7 Competition policy, privatisation and regulation Introduction 7.1 The case for competition 7.2 Competition policy 7.3 Privatisation 7.4 Regulation 7.5 Conclusions Summary Questions for discussion Exercises Further reading 8 Government intervention and the market system Introduction 8.1 Income distribution and the equity–efficiency trade-off 8.2 Market failures 8.3 Government intervention 8.4 Government failure 8.5 Conclusions Summary Questions for discussion Exercises Further reading 9 Business and the environment Introduction 9.1 Economic growth and the environment 9.2 Environmental policies 9.3 Policy instruments: design and effect 9.4 Impact on business 9.5 Conclusions Summary Questions for discussion Exercises Further reading 10 Hiring labour and the investment decision Introduction 10.1 The hiring decision 10.2 The investment decision 10.3 Conclusions Summary Questions for discussion Exercises Further reading Part II The macroeconomic framework 11 Aggregate supply, aggregate demand and the price level Introduction 11.1 How is gross domestic product (GDP) calculated? 11.2 Potential GDP, actual GDP, and GDP at purchasing power parity (PPP) 11.3 The aggregate supply (AS) curve 11.4 Aggregate demand (AD) and money 11.5 Conclusions Summary Questions for discussion Exercises Further reading Appendix 11.1: The money supply process 12 Price stability and central banks Introduction 12.1 What is price stability? 12.2 Deviation from price stability 1: inflation 12.3 Deviation from price stability 2: deflation