Markets for Managers A Managerial Economics Primer

Successful managers possess an understanding of economic and market principles as they relate to business itself. Markets for Managers presents managerial economics in a casual, accessible format that will help management professionals take economic realities into account when running their companies or divisions. The book takes a global perspective while covering the full range of micro- and macroeconomic principles that managers around the world need to know. Complete with online resources that include further reading and a YouTube playlist, this guide puts business management practice within its economic context to produce a practical tool for managers.

By understanding market operation and what might cause market failure, management professionals can lead companies that respond to market pressures and align operating strategies with economic realities. Monetary and fiscal policies affect businesses of all sizes, and in Markets for Managers, business leaders can learn how to read the ever-shifting fiscal landscape.

• Delivers market information tailored to managers and the managerial decision-making process
• Comprehensively explains macro- and microeconomic ideas in language that's accessible
• Provides concrete suggestions for utilizing market knowledge to improve internal operations and align incentives
• Helps managers build a global view of business for optimal decision making

The practical format of Markets for Managers is perfect for professionals and students who want to gain an applied perspective on today's most pressing economic issues.

ANTHONY J. EVANS, PHD, is Associate Professor of Economics at ESCP Europe Business School. He has taught for ESCP Europe, Cotrugli Business School, Danube University, and Helsinki School of Economics, as well as designing and managing custom programmes. Anthony participated in the Global Colloquium for Participant-Centred Learning at Harvard Business School and was a Fulbright Scholar-in-Residence at San Jose State University. He is a member of the Institute of Economic Affairs’ Shadow Monetary Policy Committee. He received his MA and PhD in Economics from George Mason University, USA, and a BA (Hons) from the University of Liverpool, UK.

Preface ix

Introduction xi

CHAPTER 1 Incentives Matter 1

1.1 Managerial Individualism 2

1.2 Demand Curves 5

1.3 Elasticity 12

Notes 16

CHAPTER 2 Cost and Choice 19

2.1 Opportunity Cost 20

2.2 Diminishing Marginal Returns 22

2.3 The Planning Horizon 26

2.4 Cost vs. Waste 28

Notes 29

CHAPTER 3 Market Exchange 33

3.1 Market Equilibrium 33

3.2 Comparative Statics 36

3.3 Information Economics 41

Notes 44

CHAPTER 4 Prices and Economic Calculation 47

4.1 Entrepreneurship 48

4.2 The Firm 52

4.3 Price Discrimination 54

4.4 The Knowledge Problem 58

4.5 Internal Markets 60

Notes 63

CHAPTER 5 Competition and the Market Process 67

5.1 Market Concentration 67

5.2 Collusion 69

5.3 Market Contestability 72

5.4 Monopoly Power 77

Notes 78

CHAPTER 6 Capital Theory and Recalculation 81

6.1 Microclimate 82

6.2 Unemployment 84

6.3 Recalculation 90

Notes 93

CHAPTER 7 Public Finance 97

7.1 Taxation 97

7.2 Bonds 101

7.3 Banking 104

7.4 Saving 107

7.5 Real Business Cycles 108

7.6 National Income Accounting 109

Notes 112

CHAPTER 8 Monetary Theory 117

8.1 Inflation 118

8.2 Monetary Policy 126

8.3 Monetary Regimes 133

8.4 Macroeconomic Fluctuations 135

Notes 137

CHAPTER 9 Fiscal Policy 141

9.1 The Great Depression 142

9.2 Fiscal Stimulus 144

9.3 Expansionary Fiscal Contractions 150

9.4 Confidence 153

9.5 Laissez-faire 155

9.6 The Phillips Curve 156

Notes 158

CHAPTER 10 International Economics 163

10.1 Globalisation and Trade Theory 164

10.2 Balance of Payments 168

10.3 Foreign Exchange Markets 170

10.4 Currency Regimes 175

Notes 179

CHAPTER 11 Behavioural Economics 183

11.1 Behavioural Anomalies 184

11.2 Market Efficiency 188

Notes 194

CHAPTER 12 Global Prosperity 199

12.1 Growth Theory 199

12.2 Happiness 202

12.3 Economic Freedom 206

12.4 Public Choice Theory 208

12.5 Transition Economics 215

Notes 223

Bibliography 231

Index 000

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