Economics: The Basics

289 Pages·2014·2.492 MB·English

by  Tony Cleaver

ECONOMICS
THE BASICS
Now in its third edition, Economics: The Basics continues to provide an
engaging and topical introduction to the key issues in contemporary eco-
nomics. Fully updated to take into account the global recession, ongoing
problems in Eurozone economies, changing patterns in world trade,
housing and currency markets, it covers fundamental issues, including:
(cid:1) how different economic systems function;
(cid:1) the boom and bust cycle of market economies;
(cid:1) the impact of emerging markets;
(cid:1) how price, supply and demand interact;
(cid:1) the role of the banking and finance industry;
(cid:1) whether we can emerge from recession and reduce poverty;
(cid:1) the impact of economics on the environment.
With a glossary of terms, suggestions for further reading and new case
studies covering subjects such as the choices facing developing economies,
theimpactofgrowthonthepriceofnaturalresourcesandtheaftermathof
the financial crash, this comprehensive and accessible guide is essential
reading for anyone who wants to understand how economics works.
Tony Cleaver is a Visiting Lecturer at the Universidad de los Andes and
atelColegiodeEstudiosSuperioresdeAdministración(CESA)inBogota,
Colombia.HewaspreviouslySeniorTeachingFellowinEconomicsatthe
University of Durham, UK.
THE BASICS
ACTING CONTEMPORARYLITERATURE
BELLAMERLIN SUMANGUPTA
AMERICANPHILOSOPHY CRIMINALLAW
NANCYSTANLICK JONATHANHERRING
ANCIENTNEAREAST CRIMINOLOGY(SECONDEDITION)
DANIELC.SNELL SANDRAWALKLATE
ANTHROPOLOGY DANCESTUDIES
PETERMETCALF JOBUTTERWORTH
ARCHAEOLOGY(SECONDEDITION) EASTERNPHILOSOPHY
CLIVEGAMBLE VICTORIAS.HARRISON
ARTHISTORY ECONOMICS(THIRDEDITION)
GRANTPOOKEANDDIANANEWALL TONYCLEAVER
ARTIFICIALINTELLIGENCE EDUCATION
KEVINWARWICK KAYWOOD
THEBIBLE ENERGY
JOHNBARTON MICHAELSCHOBERT
BIOETHICS EUROPEANUNION(SECONDEDITION)
ALASTAIRV.CAMPBELL ALEXWARLEIGH-LACK
BUDDHISM EVOLUTION
CATHYCANTWELL SHERRIELYONS
THECITY FILMSTUDIES(SECONDEDITION)
KEVINARCHER AMYVILLAREJO
FINANCE(SECONDEDITION) THEOLYMPICS
ERIKBANKS ANDYMIAHANDBEATRIZGARCIA
FREEWILL PHILOSOPHY(FIFTHEDITION)
MEGHANGRIFFITH NIGELWARBURTON
GENDER
PHYSICALGEOGRAPHY
HILARYLIPS
JOSEPHHOLDEN
GLOBALMIGRATION
POETRY(SECONDEDITION)
BERNADETTEHANLONANDTHOMAS
VICINIO JEFFREYWAINWRIGHT
HUMANGENETICS POLITICS(FOURTHEDITION)
RICKILEWIS STEPHENTANSEYANDNIGEL
JACKSON
HUMANGEOGRAPHY
ANDREWJONES PUBLICRELATIONS
RONSMITH
INTERNATIONALRELATIONS
PETERSUTCHANDJUANITAELIAS THEQUR’AN
MASSIMOCAMPANINI
ISLAM(SECONDEDITION)
COLINTURNER
RACEANDETHNICITY
JOURNALISMSTUDIES PETERKIVISTOANDPAULR.CROLL
MARTINCONBOY
RELIGION(SECONDEDITION)
JUDAISM MALORYNYE
JACOBNEUSNER
RELIGIONANDSCIENCE
LANGUAGE(SECONDEDITION) PHILIPCLAYTON
R.L.TRASK
RESEARCHMETHODS
LAW
NICHOLASWALLIMAN
GARYSLAPPERANDDAVIDKELLY
ROMANCATHOLICISM
LITERARYTHEORY(THIRDEDITION)
HANSBERTENS MICHAELWALSH
LOGIC SEMIOTICS(SECONDEDITION)
JCBEALL DANIELCHANDLER
MANAGEMENT SHAKESPEARE(THIRDEDITION)
MORGENWITZEL SEANMCEVOY
MARKETING(SECONDEDITION) SOCIALWORK
KARLMOOREANDNIKETHPAREEK MARKDOEL
MEDIASTUDIES SOCIOLOGY
JULIANMCDOUGALL KENPLUMMER
METAPHYSICS SPECIALEDUCATIONALNEEDS
MICHAELREA JANICEWEARMOUTH
SUBCULTURES THEATRESTUDIES(SECONDEDITION)
ROSSHAENFLER ROBERTLEACH
TELEVISIONSTUDIES WOMEN’SSTUDIES
TOBYMILLER BONNIESMITH
TERRORISM WORLDHISTORY
JAMESLUTZANDBRENDALUTZ PETERN.STEARNS
ECONOMICS
THE BASICS
THIRD EDITION
Tony Cleaver
Thirdeditionpublished2015
byRoutledge
2ParkSquare,MiltonPark,Abingdon,OxonOX144RN
andbyRoutledge
711ThirdAvenue,NewYork,NY10017
RoutledgeisanimprintoftheTaylor&FrancisGroup,aninformabusiness
©2015TonyCleaver
TherightofTonyCleavertobeidentifiedasauthorofthisworkhasbeen
assertedbyhiminaccordancewithsections77and78oftheCopyright,
DesignsandPatentsAct1988.
Allrightsreserved.Nopartofthisbookmaybereprintedorreproduced
orutilisedinanyformorbyanyelectronic,mechanical,orothermeans,
nowknownorhereafterinvented,includingphotocopyingandrecording,
orinanyinformationstorageorretrievalsystem,withoutpermissionin
writingfromthepublishers.
Trademarknotice:Productorcorporatenamesmaybetrademarksor
registeredtrademarks,andareusedonlyforidentificationand
explanationwithoutintenttoinfringe.
FirsteditionpublishedbyRoutledge2004
SecondeditionpublishedbyRoutledge2011
BritishLibraryCataloguinginPublicationData
AcataloguerecordforthisbookisavailablefromtheBritishLibrary
LibraryofCongressCataloginginPublicationData
Cleaver,Tony,1947-
Economics:thebasics/TonyCleaver.--Thirdedition.
pagescm
Includesbibliographicalreferencesandindex.
1.Economics.I.Title.
HB171.C6552015
330--dc23
2014004824
ISBN:978-1-138-02353-6(hbk)
ISBN:978-1-138-02354-3(pbk)
ISBN:978-1-315-76200-5(ebk)
TypesetinBembo
byTaylor&FrancisBooks
CONTENTS
1 A world in upheaval 1
2 A choice of economic systems 25
3 Prices, markets, coffee and real estate 48
4 The business of supply 77
5 Inflation and unemployment: boom and bust 109
6 Money, banks, bubbles and crises 142
7 National income, world trade and multinational
enterprise 178
8 Can we reduce poverty and protect the environment? 216
Glossary 251
Index 271
This page intentionally left blank
(cid:1)
1
A WORLD IN UPHEAVAL
You cannot make a lot sense of what goes on in the world without
some knowledge of basic economics.
In my own lifetime, three major upheavals have shaken the
world order to its very roots: the oil price shocks of the 1970s;
the collapse of the centrally planned economies at the end of the
1980s, and now a widespread and long-lasting recession that is
currently depressing the incomes of billions of people around the
globe.
Quite apart from sudden cataclysmic shocks like these, there are
alsoanynumberofotherissues–somegrowinginimportancewith
a slow burn, others just a dull persistent ache that never goes
away – that demand our attention and understanding. All have
important economic dimensions: climate change, bank panics,
health care, world poverty, immigration, educational reform, even
overseas military engagements … the list is endless.
To fully understand the implications of these and many other
issues requires serious, though not very difficult, economic analysis.
The aim of this text, dear reader, is thus to give you some insight
into how some of these complex issues can be unravelled, how
economics works and contributes to a balanced appraisal of con-
troversial and contemporary affairs, and therefore how your own
opinions can be better informed.