Economics: New Classical Versus Neoclassical Frameworks

This innovative text ushers in a new way of examining basic economic issues. It teaches economics from a different standpoint, using a division–of–labor theme to eliminate the need for a dichotomy between microeconomics and macroeconomics. This text shows how resource allocation and levels of division of labor are determining factors for demand and supply. It also illustrates the ways that unemployment and business cycles are seen as features of the network of division of labor.
While innovative in content, this book keeps the continuity of mainstream economics through a synthesis of existing and emerging branches of economics. It is an exceptional work that will encourage both creative and critical thinking.

Spis treści:
Part I: Economic Environment: Introduction:.
1. What is Economics?.
Analytical Framework of Economics.
Neoclassical Economics vs. New Classical Economics.
Structure of the Text and Different Ways to Use it.
2. Preference and Utility Function.
Scientific Approach to Studies of Human Behavior.
Preference and Utility Function.
Convex Preference Relation, Quasi–concave Utility Function, Diminishing Marginal Rates of Substitution, and Desire for Diverse Consumption.
Ordinal vs. Cardinal Theory of Utility and Diminishing Marginal Rate of Substitution vs. Diminishing Marginal Utility.
3. Production Conditions.
Neoclassical Framework vs. New Classical Framework.
Neoclassical Environment of Production.
New Classical Production Environment.
Endogenous cum Exogenous Comparative Advantage.
Part II: Neoclassical Framework: .
4. Neoclassical Decision Problems.
Budget Constraint and Dichotomy Between Pure Consumers and Firms.
A Pure Consumer′s Constrained Utility Maximization Problem.
Comparative Statistics of the Pure Consumer′s Utility Maximization Problem.
A Pure Consumer′s Expenditure Minimization Problem.
Recovering Util ity Function from a Demand System.
Revealed Preference.
A Producer′s Decision Problem in a Walrasian Regime.
5. General Equilibrium in the Neoclassical Frameworks.
General Equilibrium in a Walrasian Model.
Neoclassical General Equilibrium Models.
Comparative Statistics of Neoclassical General Equilibrium.
Welfare Implications of the Neoclassical General Equilibrium
Equilibrium in Neoclassical Game models.
Part III: New Classical Framework: .
6. Consumer–producers′ Decisions to Choose Optimum Level and Pattern of Specialization.
The New Classical Framework and Transaction Costs.
Configurations and Corner Solutions in the New Classical Framework.
The Optimum Resource Allocation for a Given Level and Pattern of Specialization.
The Optimum Level and Pattern of Specialization.
Neoclassical and New Classical Laws of Supply and Elasticity of Substitution.
7. New Classical General Equilibrium and Its Welfare Implications.
Neoclassical vs. New Classical General Equilibrium.
How Does the Market Coordinate the Division of Labor and Utilize Network Effects.
Inframarginal Comparative Statistics of New Classical General Equilibrium.
Efficiency of the Invisible Hand.
8. Trade Pattern and Professional Middlemen.
Why Can Professional Middleman Make Money? What Are Determinants for Business Success.
A Model with Trading Activities and Heterogeneous Parameters.
Decisions to Be a Professional Middleman.
Market Structures and Corner Equilibria.
The Equilibrium Size of the Network of Division of Labor.
Emergence of Professional Middlemen and a Hierarchical Structure of Economic Organization.
Determinants of Trade Pattern and Successful Business.
Part IV: Institution of the Firm and Pricing through Bargaining and Contracting: .
9. Labor Market and Institution of the Firm.
What is the Institution of the Firm.
Is It Fair to Have Asymmetric Relationship Between Bos s and Employees.
Story behind the Model.
Emergence of the Firm from the Division of Labor.
The Distinction Between ex ante and ex post Production Functions and the New Classical Analysis of Demand and Supply.
Economies of Division of Labor, Economies of the Firm, and Coase Theorem.
10. Pricing Mechanism Based on Bargaining.
Bargaining Game, Strategic Behavior, Opportunistic Behavior.
Nash Bargaining Game.
Endogenous Transaction Costs caused by Information Asymmetry.
Alternating Offer Bargaining Games.
Dynamic Bargaining Game and the Division of Labor.
How Does Competition for a Greater Share of Gains from the Division of Labor.
Generate Endogenous Transaction Costs.
How Can Endogenous Transaction Costs be Eliminated by Consideration of Reputation.
Non–credible Commitment and Soft Budget Constraint.
11. Endogenous Transaction Costs and Theory of Contract, Ownership, and Residual Rights.
Endogenous Transaction Costs and Moral Hazard.
Neoclassical Principal–agent Models.
A New Classical General Equilibrium Model of Principal–agent.
The Trade off Between Endogenous Transaction Costs caused by Moral Hazard and Monitoring Cost.
The Grossman–Hart–Moore Model of Optimal Ownership Structure.
Part V: Trade Theory and More General New Classical Models:.
12. Emergence of International Trade from Domestic Trade and Emergence of New Products.
Endogenous Trade Theory and Endogenous Number of Consumer Goods.
A New Classical Trade Model with Fixed Learning Costs.
How are Demand and Supply Functions Determined by Individuals′ Levels of Specialization.
Inframarginal Comparative Statistics of the Optimum Decisions.
How is the Level of Division of Labor in Society Determined in the Market.
Inframarginal Comparative Statistics of General Equilibrium and Many Concurrent Economic Phenomena.
Emergence of International Trade from Domestic Trade.
Comovement of Division of Labor and Consumption Variety.
Trade off Between Economies of Specialization and Coordination Costs.
A Neoclassical Model Endogenizing the Number of Consumption Goods on the Basis of the Trade off Between Economies of Scale and Consumption Variety.
An Extended Murphy–Shleifer–Vishny Model with Compatibility between Economies of Scale and Competitive Market.
13. Exogenous and Endogenous Comparative Advantages, Division of Labor, and Trade.
Endogenous vs. Exogenous Comparative Advantage.
A Ricardian Model with Exogenous Comparative Technological Advantage and Transaction Costs.
Analysis of Decisions vs. Analysis of Equilibrium.
Economic Development and Trade Policy.
Comparative Endowment Advantage and Transaction Efficiency.
14. More General New Classical Models.
Theoretical Foundation of New Classical Economics.
A General New Classical Model with ex ante Different Consumer–producers.
The Existence of General Equilibrium.
Equilibrium Organism and Efficiency of the Invisible Hand in Coordinating Division of Labor.
A Smithian Model with Dual Structure.
Trade Pattern and Income Distribution.
Part VI: Urbanization, Population, the Trade off Between Working and Leisure:.
15. Urbanization, Dual Structure Between Urban and Rural Areas, and the Division of Labor.
Why and How Cities Emerge from the Division of Labor?.
Emergence of Cities and of the Dual Structure Between Urban and Rural Areas.
Why Can Geographical Concentration of Transactions Improve Transaction Efficiency.
Simultaneous Endogenization of Level of Division of Labor, Location Pattern of Residences, Geographical Pattern of Transactions, and Land Prices.
Fujita–Krugman Model of Urbanization.
16. The Trade off Between Work and Leisure and Impacts of the Resource Endowment and Population on the Division of Labor.
Why Can Division of Labor Enlarge the Scope for the Efficient Trade off Between Wo