Trillion Dollar Economists

Book description

A detailed look at how economists shaped the world, and how the legacy continues

Trillion Dollar Economists explores the prize-winning ideas that have shaped business decisions, business models, and government policies, expanding the popular idea of the economist's role from one of forecaster to one of innovator. Written by the former Director of Economic Research at Bloomberg Government, the Kauffman Foundation and the Brookings Institution, this book describes the ways in which economists have helped shape the world – in some cases, dramatically enough to be recognized with a Nobel Prize or Clark Medal. Detailed discussion of how economists think about the world and the pace of future innovation leads to an examination of the role, importance, and limits of the market, and economists' contributions to business and policy in the past, present, and future.

Few economists actually forecast the economy's performance. Instead, the bulk of the profession is concerned with how markets work, and how they can be made more efficient and productive to generate the things people want to buy for a better life. Full of interviews with leading economists and industry leaders, Trillion Dollar Economists showcases the innovations that have built modern business and policy. Readers will:

  • Review the basics of economics and the innovation of economists, including market failures and the macro-micro distinction
  • Discover the true power of economic ideas when used directly in business, as exemplified by Priceline and Google
  • Learn how economists contributed to policy platforms in transportation, energy, telecommunication, and more
  • Explore the future of economics in business applications, and the policy ideas, challenges, and implications

Economists have helped firms launch new businesses, established new ways of making money, and shaped government policy to create new opportunities and a new landscape on which businesses compete. Trillion Dollar Economists provides a comprehensive exploration of these contributions, and a detailed look at innovation to come.

Table of contents

  1. Preface
  2. Chapter 1: Introduction: Economists as Innovators
    1. Organization of the Book
    2. My Personal Interest (and Bias)
    3. Notes
  3. Chapter 2: An Easy Introduction to Economics
    1. Rationality
    2. Markets
    3. Market Failures
    4. The Macro–Micro Distinction
    5. Economic Growth in the Short and Long Run
    6. The Equity–Efficiency Tradeoff
    7. Innovation and Growth: The Role of Economists
    8. The Bottom Line
    9. Notes
  4. Part I: The Power of Economic Ideas: Direct Use in Business
    1. Chapter 3: The Price Is Right
      1. The Bloomberg Way of Pricing
      2. Auctions
      3. Different Prices for Different Folks
      4. The Bottom Line
      5. Notes
    2. Chapter 4: Minimizing Costs
      1. Optimization
      2. Learning by Doing
      3. The Bottom Line
      4. Notes
    3. Chapter 5: Beyond Moneyball
      1. A Brief Guide to Regression Analysis
      2. The Business of Forecasting
      3. The Business of Economic Consulting
      4. Data Analytics and Big Data
      5. Econometrics and Sports: Moneyball
      6. Regulatory Moneyball
      7. The Bottom Line
      8. Notes
    4. Chapter 6: Experiments in Economics and Business
      1. Economics in the Lab: Vernon Smith and Experimental Economics
      2. Lab Experiments in Business: Focus Groups
      3. Economic Experiments in the Field: Randomized Controlled Trials
      4. Business Experimentation in the Field
      5. Innovation and Entrepreneurship: Experimentation as the Foundation of Growth
      6. The Bottom Line
      7. Notes
    5. Chapter 7: Matchmaker, Matchmaker
      1. A Gentle Introduction to Market Design and Matching Theory
      2. Matchmaking in the Labor Market
      3. Matchmaking and Online Dating
      4. The Bottom Line
      5. Notes
    6. Chapter 8: Economists and Mostly Good Financial Engineering
      1. Not Putting Your Eggs in One Basket: The Rise of Index Investing
      2. Efficient Markets and Their Implications
      3. Behavioral Finance
      4. Valuing Options: Upsides and Downsides
      5. The Bottom Line
      6. Notes
  5. Part II: Economist-Inspired Policy Platforms for Private Business
    1. Chapter 9: Planes, Trains, and . . . Trucks
      1. Origins of Transportation Regulation
      2. Airline Deregulation
      3. Trucking Deregulation
      4. Railroad Deregulation
      5. Deregulation’s Impact: The Transportation Industry
      6. Deregulation as a Business Platform
      7. The Bottom Line
      8. Notes
    2. Chapter 10: Economists and the Oil and Gas Revolution
      1. The Origins and Decline of Price Regulation of Fossil Fuels
      2. The Oil and Gas Supply Revolution
      3. The Energy Revolution as a Platform Technology
      4. The Bottom Line
      5. Notes
    3. Chapter 11: Economists and the Telecommunications Revolution
      1. Economists in a Quick History of Communications
      2. When Natural Monopolies End: The Run-Up to the AT&T Antitrust Case
      3. Competition in Telecommunications: The Benefits of AT&T’s Breakup
      4. Economists and Price Cap Regulation
      5. Economists and Spectrum Allocation
      6. The Bottom Line
      7. Notes
    4. Chapter 12: Economists, Financial Policy, and Mostly Good Finance
      1. Economists and Competition in Brokerage Commissions
      2. Economists as Detectives: Accelerating Automated Trading
      3. Economists and the Financial Crisis
      4. How Did the Crisis Happen? A Quick and Easy Guide
      5. Subprime Lending
      6. Excessive Leverage: An Introduction
      7. The Pre-crisis Demise of SEIR
      8. The Glass–Steagall Debate
      9. The Bottom Line
      10. Notes
  6. Part III: Looking Ahead
    1. Chapter 13: Economic Ideas in Waiting: Business Applications
      1. Prediction Markets
      2. Potentially Good Financial Innovations
      3. Congestion Pricing
      4. The Bottom Line
      5. Notes
    2. Chapter 14: Economic Ideas and Challenges on the Policy Shelf: Business Implications
      1. Federal Budget Deficits as Drivers of Policy Change
      2. Premium Support for Medicare and Medicaid
      3. Taxing Consumption
      4. Taxing Carbon
      5. The Bottom Line
      6. Notes
    3. Chapter 15: The Future of Economics: What It Means for Business and Economists
      1. The Revolution in Economics
      2. How Economics Will Continue to Affect Business
      3. Implications for Economists
      4. Concluding Thoughts
      5. Notes
  7. Appendix: Prizes in Economics
  8. About the Author
  9. Index
  10. End User License Agreement

Product information

  • Title: Trillion Dollar Economists
  • Author(s): Robert Litan
  • Release date: September 2014
  • Publisher(s): Wiley
  • ISBN: 9781118781807