The Economic Theory of Costs by McCaffrey, Matthew;

Short description:

This volume explores, develops, and critiques the rich literature on costs, examining the many roles cost plays in economic theory and practice. The book especially studies costs from the perspective of the Austrian or "causal-realist" approach to economics. The chapters integrate historical work with contemporary research, finding valuable crossroads between numerous traditions in economics. They examine the role of costs in theories of choice and opportunity costs; demand and income effects; production and distribution; risk and interest rates; uncertainty and production; monopsony; Post-Keynesianism; transaction costs; socialism and management; and social entrepreneurship. Together, these essays represent an update and restatement of a central element in the economic way of thinking. Each chapter reveals how the Austrian, causal-realist approach to thinking about costs can be used to solve an important problem or debate in economics.

Long description:

The theory of costs is a cornerstone of economic thinking, and figures crucially in the study of human action and society. From the first day of a principles-level course to the most advanced academic literature, costs play a vital role in virtually all behaviors and economic outcomes. How we make choices, why we trade, and how we build institutions and social orders are all problems that can be explained in light of the costs we face.

This volume explores, develops, and critiques the rich literature on costs, examining some of the many ways cost remains relevant in economic theory and practice. The book especially studies costs from the perspective of the Austrian or “causal-realist” approach to economics. The chapters integrate the history of economic thought with contemporary research, finding valuable crossroads between numerous traditions in economics. They examine the role of costs in theories of choice and opportunity costs; demand and income effects; production and distribution; risk and interest rates; uncertainty and production; monopsony; Post-Keynesianism; transaction costs; socialism and management; and social entrepreneurship.

Together, these papers represent an update and restatement of a central element in the economic way of thinking. Each chapter reveals how the Austrian, causalrealist approach to costs can be used to solve an important problem or debate in economics. These chapters are not only useful for students learning these concepts for the first time: they are also valuable for researchers seeking to understand the unique Austrian perspective and those who want to apply it to new problems.

Table of Contents:

Introduction: "The Economic Theory of Costs in Perspective"

Chapter 1:"Contemporary Debates on Opportunity Cost Theory and Pedagogy"

Chapter 2: "The ‘Income Effect’ in Causal-Realist Price Theory"

Chapter 3:"From Marshallian Partial Equilibrium to Austrian General Equilibrium: The Evolution of Rothbard’s Production Theory"

Chapter 4: "Man, Economy and State, Original Chapter 5:　Producer’s Activity"

Chapter 5: "The Myth of the Risk Premium"

Chapter 6: "Time and the Theory of Cost"

Chapter 7: "Monopsony Theory Revisited"

Chapter 8: "Costs and Pricing: An Austro-Post-Keynesian Synthesis?"

Chapter 9: "Austrian Economics and Transaction Cost Economics: Notes on a Doubtful Compatibility"

Chapter 10: "The Management Problem of Socialism: Cost at the Expense of Value"

Chapter 11: "Economic Calculation and the Limits of Social Entrepreneurship"