Contents -- List of Tables, Graphs, Boxes -- Tables -- Graphs -- Boxes -- Introduction -- 1 The Basic Market Mechanism -- A New Twist on the Basic Market Mechanism -- The Market Mechanism in Transition Economies -- The Problem of Price Inelasticity -- Elasticity in the Supply Curve -- Elasticity of the Demand Curve -- Agriculture in Advanced Market Economies -- 2 Firms and the Markets They Operate In -- The Theory of the Firm Under Uncertainty -- The Theory of the Firm under Certainty -- The Corrupt Firm -- The Goal of the Firm -- Maximize the Firm's Assets -- Obtain the Right Financing Mix -- Structure the Firm to Maximize Value -- Imperfect Competition in Transition Economies -- Summary -- 3 The Factors of Production -- How Incomes Are Determined -- The Classical Theory of Capital -- The Theory of Competitive General Equilibrium -- The Microeconomic Theory of Foreign Trade -- 4 The Role of Government -- An Overview of the Role of Government -- Public Choice Theory -- Public Finance -- Government Regulation of Markets -- The Coase Theorem -- Is There a Tradeoff Between Equality and Economic Efficiency? -- From "Market versus Government" to Sovereign Governance -- 5 Measuring Economic Activity: The Key to Understanding -- The Input-Output Table -- Visualizing an Adjustment to Equilibrium -- 6 Macroeconomics -- Monetary and Fiscal Policy in the Input-Output Context -- Prices in Transition -- Further Extension on the Theme of Calculating Variance -- GDP, Wealth, and Asset Prices -- The Keynesian Model Again -- The Transition as Business Cycle -- Basic Keynesian Macroeconomics and Soviet Central Planning -- A Basic Keynesian Analysis of the Economies in Transition -- 7 Monetary Policy and Its Prerequisites -- Barter versus Money -- What Is Money Exactly? -- Modern Money-How It Works -- Additional Economic Distortions Due to Macroeconomic Policy.

8 Foreign Exchange Rates and Exchange Rate Crises -- Foreign Exchange Rates -- The Anomaly of Fixed Exchange Rates -- Floating Exchange Rates -- Exchange Rate Crises -- Central Banks and Fixed Exchange Rates -- Speculative Attacks on Fixed Exchange Rates -- Our Theory of Exchange Rate Determination -- 9 Transition in the Context of the International Financial System -- Supply and Demand in Asset Markets -- Financial Assets in the Transition -- Summary -- 10 The Consequences for Open-Economy Macroeconomics -- Monetary and Fiscal Policy under Fixed and Floating Exchange Rates -- Reasoning with Accounting Identities -- The Case of Japan -- 11 Benevolent and Malevolent Markets -- The Rational Basis for Stock Market Bubbles -- The Theory of Efficient Markets -- 12 Japan: The First Demographic Transition -- Dire Stats -- Round Up the Usual Suspects -- What Changed around 1990? -- What Is Not to Be Done? -- Then What Is to Be Done? -- Conclusion -- Notes -- Introduction -- Chapter 1. The Basic Market Mechanism -- Chapter 2. Firms and the Markets They Operate In -- Chapter 3. The Factors of Production -- Chapter 4. The Role of Government -- Chapter 6. Macroeconomics -- Chapter 11. Benevolent and Malevolent Markets -- Index -- About the Authors.