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Suggest me some economic concepts to learn

  1. Apr 9, 2012 #1
    Please suggest me some economic concepts to learn - the more important, the better. I'm self-teaching economics, and want to find more concepts to learn.


    Here are some of the ones I know as of now (might edit it as I learn more):

    Factors of production and final product (inputs and outputs)
    The law of supply and demand
    Elasticity of supply
    Elasticity of demand
    Marginal cost
    Average total cost
    Marginal revenue
    Marginal profit
    Profit MC=MR maximization model
    Total cost
    Total revenue
    Total profit
    Total cost & total revenue based profit-maximization model
    Variable costs
    Fixed costs
    Marginal utility
    Total utility
    Production possibility frontier
    Opportunity cost
    Consumer surplus
    Producer surplus
    Total product
    Average product
    Marginal product
    Capital accumulation
    Leontief input-output model
    Cobb-Douglas production function
    Neoclassical (Solow) growth model
    Capital stock
    Technological innovation
    Hyperinflation
    Stagflation
    Division of labor
    Capital intensity
    Indifference curves
    Marginal rate of substitution
    Budget constraint
    Laffer Curve
    Velocity of money
    Backward Bending Labor Supply Curve
    Monetary policy
    Extensive growth
    Intensive growth
    Capital depreciation

    Keynesian:
    Aggregate supply and demand
    Short run aggregate supply
    Long run aggregate supply
    Keynesian cross
    Consumption function
    Marginal propensity to consume
    Marginal propensity to save
    Circular flow of income model
    Interest rates and loanable funds model
    Interest rates & consumption relationships
    Multiplier effect
    Keynesian multiplier
    Components of aggregate demand (consumption, government spending, investment, net exports...)
    Potential output
    Fiscal policy

    Marxian:
    Surplus value
    Money diagrams (M-C-M', C-M-C, etc)
    Constant capital
    Variable capital
    Rate of exploitation
    Socially necessary labor time
    Labor theory of value
    Living labor
    Dead labor
    Productive labor
    Unproductive labor
    Falling rate of profit
    Super profit based socially necessary labor time shifts due to capitalistic competition
    Overproduction
    Crisis due to over-accumulation of capital
    Constant capital, variable capital and surplus value relationship
    Production for use and production for exchange
    Labor power
    Labor as a commodity

    Other
    Detailed Soviet planning structure
    Material balance planning
    Physical magnitude accounting and its implications
    Yugoslavian market socialism
    Soviet growth strategies, investment types and growth rates, as well as causes of stagnation
    Soviet remuneration methods
    Socialistic competition and its application by the Soviets
    Organization models (standard (entirely capitalist-owned, all the surplus value goes to the capitalist), corporations, worker cooperatives)
     
    Last edited: Apr 9, 2012
  2. jcsd
  3. Apr 9, 2012 #2

    Ryan_m_b

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    Only thing I suggest is looking at different models of organisation e.g. cooperatives vs corporates etc.
     
  4. Apr 9, 2012 #3
    I'm familiar with those already. Going to add them to my list.
     
  5. Apr 9, 2012 #4

    Pyrrhus

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    Here it is easier

    Buy a Microeconomics book, and go through it.

    Buy a Macro book, and go through it.

    Buy a econometrics book, and go through it
     
  6. Apr 9, 2012 #5
    I've done that, except with free and open-source online books, as well as free and open-source online lectures, and various articles on the topic. I'm simply asking people to suggest some important concept that I could've missed, so that I could learn them if I don't know them already.
     
  7. Apr 9, 2012 #6

    turbo

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    @OP, you might interview owners of small businesses that have to "roll with the punches" as things change. Line of credit declining? Shipment options getting more expensive? Competitors moving in on your business? There are millions of variables, and if you are the owner of a small business, you have to cope with them. Learn economics "on the ground" if you want to understand economics. That's just my take on things, and I live in the most rural state in the country, so you may discount it if you wish.
     
  8. Apr 10, 2012 #7

    BWV

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    just read Adam Smith, Hayek, & Public Choice theory
     
    Last edited: Apr 10, 2012
  9. Apr 10, 2012 #8

    Pyrrhus

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    The question is.. Do you want to learn economics or learn about economics?

    I doubt that you reading those books got everything unless you have a good mathematical background.
     
  10. Apr 10, 2012 #9

    BWV

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    mathematics in economics beyond some basic manipulation of accounting entities is just analogy, you can safely skip most all of it

    there is no math worth speaking of in Adam Smith or Hayek. Buchanan's Calculus of Consent is rooted in game theory, but its not necessary for understanding the book
     
  11. Apr 10, 2012 #10
    Re: some economic concepts to learn

    Here's one more for your list, a key to understanding our (warming) world: negative externalities.
     
  12. Apr 10, 2012 #11

    BWV

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    Re: some economic concepts to learn

    true, although public choice does provide the key to understanding policy responses
     
  13. Apr 15, 2012 #12
    I know and understand all the mathematical modeling behind the economic works I had read, with a few exceptions being some newly-published economic papers which use discrete mathematics rather than calculus for dynamic economic modeling (I understand it now, though, after reading up on it).
     
  14. Apr 15, 2012 #13
    I've read some Hayek, and his works (along with Mises) on the so-called economic calculation problem. The lack of concrete evidence and reasoning as well as the dogma in his works was astonishing, so I would rather not waste my time on learning Austrian economics.
     
  15. Apr 15, 2012 #14

    BWV

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    The fact that you can dismiss this very serious argument that has been at the center of modern economics (and has been basically settled in Hayek's favor) so quickly out of hand shows that you are probably wasting your time studying the topic, perhaps you should try physics or accounting
     
    Last edited: Apr 15, 2012
  16. Apr 15, 2012 #15
    Monopoly, Oligopoly, and Monopolistic competition.
     
  17. Apr 15, 2012 #16

    phinds

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    moral hazard
     
  18. Apr 16, 2012 #17
    Adan Smith:
    -Value in use
    -Value in trade
    Carl Menger:
    -first order goods and higher order goods
     
  19. Apr 17, 2012 #18
    Yes, I can dismiss arguments which lack definition, coherence and detail. This argument hasn't settled in Hayek's favor at all - a new synthesis had been created out of the economic calculation problem, which is the Lange Model, and which puts an end to the economic calculation debate.

    Why are you implying that I dismissed it quickly and out of hand? It took me a long year of reading, studying, statistic searching and analyzing to dismiss this absolutely ridiculous argument, and to find a proposed solution to it.
     
  20. Apr 17, 2012 #19
    This is absolutely wrong - mathematics is necessary to understand the extent and magnitude of Pareto inefficiency of the capitalistic system - its irrational production quotas, its predisposition to perpetual crisis, its irrational income distribution and its undermining of potential growth rates, which could be far higher if a rational system would be put in place. Neoclassical economics is based on a set of models which allow for such analysis to be made.
     
    Last edited: Apr 17, 2012
  21. Apr 17, 2012 #20
    The Lange Model still uses prices but it awkwardly tries to infer it from surplus/shortage, and creates the potential for bureaucratic abuse. What is to stop the bureaucrat from keeping prices too high to please producers or two low too please consumers? Anyway, there are more things to learn from Austrian economics then just this problem. For instance:

    http://en.wikipedia.org/wiki/Hyman_Minsky#Understanding_Minsky.27s_financial_instability_hypothesis
     
  22. Apr 17, 2012 #21
    "but it awkwardly tries to infer it from surplus/shortage"

    Not more awkwardly than a capitalistic market. The Lange Model can be adapted to have a decentralized price system on each distribution center, which would adjust to supply and demand just like in capitalism, without a need to do so centrally (which could end badly due to information losses as the information moves up the hierarchy).

    "What is to stop the bureaucrat from keeping prices too high to please producers or two low too please consumers?"

    That's like saying "What's to stop the bureaucrat from covering the transport in feces to please the public and make it laugh and not those who use this transport?". The prices would be decentrally set by each enterprise and distribution center. All the profits would be sent to the state for re-investment - such enormous investment would cause enormous economic growth. There won't be any 'producers' to benefit, as the state would be the producer.

    One should always remember that the state currently carried out very vital functions, and is responsible for education, transportations and various vital public services in most developed countries. As long as the state isn't very centralized, democratic, and is forced to release its information, then there shouldn't be a problem. There should always be a freedom of information, assembly, opinion, mass media, and so on, to keep the state in check.
     
  23. Apr 17, 2012 #22

    BWV

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    The neoclassical economics which you rail against has a very elegant mathematical proof of the Pareto efficency of free markets - no one will trade unless they gain from the transaction therefore all trades improve the welfare of both participants therefore left to their own devices markets will optimally allocate resources. Of course the model is simply, like all economic models, a tautology based upon debatable assumptions.

    the mathematics in economics is a metaphor to those who understand the issues and a fetish to those who don't because the basic variables - supply, demand etc. are immeasurable abstractions. the problems of economic modeling include but go beyond those of chaotic systems such as trying to capture all relevant variables and sensitivity to initial conditions - they also reflect the fact that the basic casual relationships are unknown and ultimately human behavior is not subject to mathematical laws. Models are useful tools for focusing on certain problems, but should not be confused with reality, nor can the be used reliably for engineering - no bridge ever failed because too many people tried to game the design, but of course this is perpetual problem with macroeconomic policy.
     
  24. Apr 17, 2012 #23
    1. Supply and Demand
    2. Trade Offs

    Learn those two things and the rest is structure and relationships of markets and institutions.
     
  25. Apr 17, 2012 #24

    BWV

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    who has heard of the Lange model? Its nearly 50 years old and I have never seen anyone mention it. I checked and there are all of six papers on SSRN.com that refer to it. Just because you found it a couple of days ago on Google does not make it the "end of the economic calculation debate".
     
  26. Apr 17, 2012 #25
    You mean make the system even more like capitalism?
    Why?

    Aren't profits in a capitalist system reinvested?
    And about state education how well do you think that is working? As for transportation, how much do you think bureaucrats are influenced buy business when awarding contracts? Do you think the roads are over maintained or under maintained and why?

    There was a move to democratize business once and in some European countries (Yugoslavia perhaps) and I think it was taken to such a state as the janitor in an engineering company had as much a say in things as the engineers. This is second hand though from someone who use to live in that area.
     
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