The Economic System

The Economic System provides an accessible account of introductory economics theory that allows students more fully to appreciate the main features and complexity of the Economic System by integrating microeconomic and macroeconomic principles on a topic-by-topic basis.

The purpose of the approach is to allow the student to understand the economy as a system of complex and inter-related features incorporating: consumers, producers, markets and governments based on an understanding of the roles of prices and markets and exchange. This structure provides a context whereby students understand that to analyse issues from an economic perspective often requires the use of both micro- and macroeconomic tools and an appreciation of the interrelationships that exist between them.

The academic and pedagogical logic underlying the structure of the book arises from the author's extensive experience in lecturing and discussions with other lecturers in economics. One of the main problems experienced by students of economics is that even those who appear to grasp concepts and models often display weaknesses in using them to better understand or analyse problems. Transferability of concepts is a real problem especially for a subject that focuses on being a problem-solving discipline where students should learn skills useful to support decision-making. An explicit aim in the book is to clarify how models and concepts in economics are useful as tools that support rigorous, methodical and logical analysis and not simply useful to solve mathematical ‘puzzles’ by providing one "correct" answer. This requires being explicit in explaining what the economic approach is about, regarding the role of theories and models to support economic analysis and also regarding how these theories and models support decision making based on economic analysis.

Chapter 1 The Economic System 1

Chapter 2 Market Analysis: Demand And Supply 35

Chapter 3 Beyond Demand: Consumers in the Economic System 77

Chapter 4 Beyond Supply: Firms in the Economic System 113

Chapter 5 Economic Activity: The Macroeconomy 155

Chapter 6 Competition in the Economic System 197

Chapter 7 Money and Financial Markets in the Economic System 239

Chapter 8 Challenges for the Economic System: Unemployment and Inflation 283

Chapter 9 Developing the Economic System: Growth and Income Distribution 321

Glossary 361

Index 387

Dr Eleanor Doyle is Lecturer in Economics at University College Cork. She currently lectures in Principles of Economics and Resourcing Organizations & Competitive Capability at the undergraduate level. She also lectures in Microeconomics and Macroeconomics at postgraduate level. Her research interests lie in the exchange rate effects on Irish trade, sources of Irish growth and organizational architecture and the resource-based view of the firm. As consumers, entrepreneurs, investors, savers, tax-payers, voters and workers, we are all affected by myriad economic decisions taken by other people. Our decisions also feed into this complex system and have an impact on others.

Blending traditional methods of economic analysis with an innovative approach that integrates micro and macro elements across nine broad topic areas, Eleanor Doyle considers outcomes of the economic system as a whole, alongside the process of how economies and markets undergo change. The Economic System provides a toolbox for analysing, understanding and addressing the economic issues that we all face.

KEY FEATURES

• A focus on the relationships between microeconomic and macroeconomic analysis means students gain a clearer understanding of their intrinsic relationships and a better appreciation of how The Economic System works.
• Comprehensive standard treatments of all topics are also provided, based on both micro- and macroeconomics.
• Nine chapters constitute the essential building blocks of the principles of economics, for use with specialist students and non-specialists alike. The focused selection of material is designed for use on both one-semester and two-semester undergraduate courses.
• An early consideration of the labour market focuses students on this market’s central role in economic well-being and serves as a specific application of the demand/supply model, emphasized throughout the text as the core of economic analysis.
• References to the the Austrian view help illustrate how economies and markets undergo change. Understanding of economic processes is required to better understand economic outcomes that we traditionally analyse through equilibrium analysis.

"Students are likely to gain not only an insight into the complexity of an economic system, but also an appreciation of economic theory and its relevance for an understanding of a wide range of current issues."
—Nat Levy, Middlesex University Business School

"This book is well targeted and at an appropriate level. The explanation of complex economics is excellent."
—David Gibbons-Wood, Aberdeen Business School

Dr Eleanor Doyle is a Lecturer in Economics at University College Cork.