Oxford University Press
2. Jan, 1992

Understanding the Market Economy

From the back cover

This book is primarily concerned with describing the economic institutions and functions of market-oriented economies and the theories to explain them. This explanation is directed in particular at readers in the former planned economies who are familiar wth neither the institutions nor the theories and so the principles of market economics are expounded especially in the context of the main problems facing economies in transition from a centrally planned to a market structure, namely privitization, the role of money, environmental policy, and international trade.

As well as providing an ideal introduction to the market economy for East and Central European students and businessmen, the book will also be of interest to Western students looking for a non-technical treatment of many current issues of economic organization. It sets out these fundamental issues clearly for those who have not previously studied them.

Arne Jon Isachsen is Professor of International Economics at the Norwegian School of Management, Oslo.

Carl B. Hamilton is a Member of the Swedish Parliament, Associate Professor of Economics at the Institute for International Economic Studies, University of Stockholm, and Research Fellow at the Centre for Economic Policy Research (CEPR), London.

Thorvaldur Gylfason is Professor of Economics at the University of  Iceland, and Research Fellow at the Institute for International Economic Studies, University of Stockholm, and the Centre for Economic Policy Research (CEPR), London.


Oxford University Press


Table of Contents

1 Introduction 1
Part I The Economic Problem
2 Production and Distribution 11
3 Supply and Demand 17
4 Economic Adjustment 27
5 The Interplay of Aggregate Supply and Demand 42
6 The Workings of a Planned Economy 61
Part II The Workings of a Market Economy
7 Prerequisites for a Market Economy 77
8 Challenges Posed by the Market 86
9 Dilemmas and Problems in a Market Economy 99
10 Why the Market Nevertheless is Useful 111
Part III Public Finance, Money, Capital, Labour, and International Trade
11 The Political Economy of Public Finance 128
12 The Role of Money 140
13 A Closer Look at the Capital Market 151
14 The Labour Market in a Competitive Economy 165
15 International Trade 175
Part IV Privatization, Accounting, and Challenges for the Future
16 Privatization in Central and Eastern Europe 190
17 Elements of Accounting 204
18 From Plan to Market: The Challenges 221
References 235
Index 239



A. Torvanger, Scandinavian Journal of Economics 96(11), 1994, pp. 133-135.

G. J. King and D. O. Porter, Journal of Baltic Studies 24(4), Winter 1993, pp. 395-402.

F. Brouwer, Journal of Common Market Studies 31(3), September 1993, pp. 411-415.

Available from Amazon.

The book has appeared in seventeen languages.