It is Friday, and in London where I am today, it is one of the first weekends of autumn. What better then, than a good read to warm the spirit!
Economic Papers provides a forum for the presentation of research and debate in applied economics and economic policy analysis. They are often published in academic periodic journals. Below are the (subjectively) 20 best of all time, as selected by the
Click on the PDF-links to download and read the individual articles.
“The Use of Knowledge In Society”
Author: Friedrich Hayek
Conclusion: Prices must be the focal point of all economic decisions.
“The Cost of Capital, Corporation Finance and the Theory of Investment”
Authors: Franco Modigliani and Merton Miller
Conclusion: A firm’s total market value is invariant to its borrowing behavior.
“Do Stock Prices Move Too Much to be Justified by Subsequent Changes in Dividends?”
Author: Stephen A. Ross
Conclusion: Stock price volatility is far too great to be simply attributed to new information about future real dividends.
“An Almost Ideal Demand System”
Authors: Angus S. Deaton and John Muellbauer
Conclusion: You can predict household demand based on the relative costs of “subsistence” versus “bliss”.
“Uncertainty and the Welfare Economics of Medical Care”
Author: Kenneth J. Arrow
Conclusion: The health care market is too plagued by moral hazard and consumers’ lack of information to be viewed as free.
“Some International Evidence on Output-Inflation Tradeoffs”
Author: Robert E. Lucas, Jr.
Conclusion: You can model what happens when consumers make decisions without knowing whether a price change also signals a relative price change.
“The Role of Monetary Policy”
Author: Milton Friedman
Conclusion: There exists a “natural rate of unemployment,” or the number of jobs a given economy can support.
“Monopolistic Competition and Optimum Product Diversity”
Authors: Avinash K. Dixit and Joseph E. Stiglitz
Conclusion: Product variety can influence the way the market dictates resource allocation. The market considers profits, while a social optimum takes into account the consumer’s surplus.
“A Theory of Production”
Authors: Charles W. Cobb and Paul H. Douglas
Conclusion: You can figure out how much production a given amount of capital and labor can yield.
“Optimal Taxation and Public Production”
Authors: Peter A. Diamond and James A. Mirrlees
Conclusion: It is possible to set taxes that minimize distortions and disincentives, and eliminate production inefficiencies.
“Capital Theory and Investment Behavior”
Author: Dale W. Jorgenson
Conclusion: Cost-of-finance (interest rates and equity yields) and taxes should drive investment decisions.
”Production, Information Costs, and Economic Organization”
Author: Armen A. Alchian and Harold Demsetz
Conclusion: Firms must continuously measure productivity. The market alone is not enough to generate peak output — strong management is also required, and firm’s will benefit from devoting resources to it.
“On The Impossibility Of Informationally Efficient Markets”
Authors: Sanford Grossman
Conclusion: In a world of dispersed information, the equilibrium price can itself be a source of information to consumers.
“Scale Economies, Product Differentiation and the Pattern of Trade”
Author: Paul Krugman
Conclusion: Standard comparative cost theory doesn’t sufficiently explain trade.
“Migration, Unemployment and Development”
Authors: John R. Harris and Michael Todaro
Conclusion: In poor countries, individuals migrate from rural to urban areas.
“The Political Economy of the Rent-Seeking Society”
Author: Anne O. Kreuger
Conclusion: Tariffs are better for countries to enact than import quotas.
“Economic Growth and Income Inequality”
Author: Simon Kuznets
Conclusion: Earlier phases of economic development are characterized by increasing income inequality.
“National Debt In A Neoclassical Growth Model”
Author: Peter A. Diamond
Conclusion: External and internal government debt can potentially reduce capital stock in the long-run.
“A Theory of Optimum Currency Areas”
Author: Robert A. Mundell
Conclusion: You can figure out the optimal number of entities for a given currency areas.
“The Economic Theory of Agency: The Principal’s Problem”
Author: Stephen A. Ross
Conclusion: There is a way to avoid moral hazard when you’re paying people a lot of money.
Thanks for posting this – these articles are a great resource! The Jorgenson link connects to the Hayek paper, however.
Thanks for the posting.These are great articles.God bless you.
Of course it is very much subjective at the end of the day … but I would most definitely include Bela Balassa’s 1961 seminal paper ‘Towards a Theory of Economic Integration’ wherein he predicted most accurately the path towards full economic integration as charted by the European Union … until it was distorted into an untenable political union.
University of Malta