- Subject index
Interest in economics is at an all-time high. Among the challenges facing the nation is an economy with rapidly rising unemployment, failures of major businesses and industries, and continued dependence on oil with its wildly fluctuating price. Economists have dealt with such questions for generations, but they have taken on new meaning and significance.Tackling these questions and encompassing analysis of traditional economic theory and topics as well as those that economists have only more recently addressed, 21st Century Economics: A Reference Handbook is a must-have reference resource.Key FeaturesProvides highly readable summaries of theory and models in key areas of micro and macroeconomics, helpful for students trying to get a "big picture" sense of the fieldIncludes introductions to relevant theory as well as empirical evidence, useful for readers interested in learning about economic analysis of an issue as well for students embarking on research projectsFeatures chapters focused on cutting-edge topics with appeal for economists seeking to learn about extensions of analysis into new areas as well as new approaches Presents models in graphical format and summarizes empirical evidence in ways that do not require much background in statistics or econometrics, so as to maximize accessibility to students.
Chapter 23: Public Choice
Public choice economics is the intersection of economics and politics. It uses the tools of economics to examine collective decisions. Public choice economics reflects three main elements: (1) methodological individualism, in which decision making occurs only with individuals; (2) rational choice, in which individuals make decisions by weighing the costs and benefits and choosing the action with the greatest net benefit; and (3) political exchange, in which political markets operate like private markets, with individuals making exchanges that are mutually beneficial (Buchanan, 2003). It is this last element that makes public choice a distinct field of economics.
Using the basic tools and assumptions of economics on collective decisions provides many insights. Economists assume that individuals are rationally self-interested in private decision making. However, ...