The Economics Book

239 Expensive technology, such as the Stealth Bomber, was developed during the Cold War. To avoid the “sucker’s payoff,” game th ...

240 it was either a huge savings of money if the other side didn’t develop it either, or the sucker’s payoff of a total defeat i ...

241 This implies that in the second-to- last round defection is also a better choice—anticipating the future defection of your r ...

242 R ich countries claim that they do not set out to keep poor countries poor—rather that relationships between them should hel ...

POST-WAR ECONOMICS 243 Many Nigerian oil workers work for foreign firms. These firms have poured investment into Nigeria but may ...

244 YOU CAN’T FOOL THE PEOPLE RATIONAL EXPECTATIONS T he rise of government intervention and spending after World War II provide ...

245 See also: Economic man 52–53 ■ Borrowing and debt 76–77 ■ The Keynesian multiplier 164–65 ■ Monetarist policy 196–201 ■ Beha ...

246 market are rational, they do not simply guess at future prices by looking at previous ones. Instead, they will attempt to fo ...

247 Traders in financial markets form rational expectations based partly on the actions of their colleagues at work. Failure to ...

248 PEOPLE DON’T CARE ABOUT PROBABILITY WHEN THEY CHOOSE PARADOXES IN DECISION MAKING B y the 1960s mainstream economics had set ...

249 See also: Economic man 52–53 ■ Economic bubbles 98–99 ■ Risk and uncertainty 162–63 ■ Irrational decision making 194–95 ■ Be ...

SIMILAR ECONOMIES CAN BENEFIT FROM A SINGLE CURRENCY EXCHANGE RATES AND CURRENCIES ...

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252 B y the early 1960s the institutions of the post-war economies were well established. Toward the end of World War II the Bre ...

253 using many different currencies, since these had to be exchanged if trade was to take place. At one extreme, having a differ ...

254 dealing with situations when business cycles weren’t completely synchronized across the region. The most obvious of these wo ...

255 The eurozone was established in 1999 as the monetary union of the 11 European Union states shown here. By 2012, there were 1 ...

256 FAMINE CAN HAPPEN IN GOOD HARVESTS ENTITLEMENT THEORY I ndian economist Amartya Sen grew up during the Great Bengal famine o ...

257 Famines such as the Congo famine of 2008 were caused by economic failure, according to Amartya Sen. He claimed that famine h ...

CONTEM ECONOM 1970–PRESENT ...