The third edition of “The Address” series is now available. A fourth revised and expanded edition of the well-known Bluebook of Worldwide Business was released in October of 2021. This third edition of “The Address” series provides a concise explanation of key topics regarding economic performance and the role it plays in the United States economy. This book provides an easy-to-read outline of key terms and general definitions that describe the world of business. It also explains growth and development topics, such as understanding why some economies are considered to be recession proof while others are not. It also covers important issues regarding international trade, inflation, and how the Federal Reserve can continue to support the economy.
“The Address – Third Edition” discusses topics that are directly related to economic growth. Issues that affect the competitiveness of a nation's economy, such as the strength of its dollar and its ability to produce goods and services, remain the focus of this book. Strategies that government can employ to promote economic growth, including trade protection, monetary policy, and public infrastructure development, are also discussed. The book also takes a close look at the issue of tax competitiveness and how it relates to economic policies. The term “tax competitiveness” is used to describe the ways in which different nations determine the level of taxation of businesses within their respective countries.
“The Address – Third Edition” also covers other important areas related to economic policy. The topics include the nature of economic policies, the reasons why they may fail and why similar policies might succeed, the types of economic policies that can work in different nations, the different types of taxes and tariffs that exist, and the various trade deals that are negotiated each year. The book briefly discusses the debate concerning the validity of measuring national economic performance by economic indicators. The author also briefly discusses the different measures of economic performance.
The authors explain that economic policies can have very divergent effects on economic growth. They also contend that there are instances where a nation's economic policies can actually prevent economic growth. For instance, if a nation polices growth strictly through raising the tax rate or cutting expenditures and only raises taxes when necessary, the economy would experience a large stimulative effect from the policies but then suffer as a result of not receiving the necessary growth in the tax base. Policy considerations are described in the introduction section and are discussed comprehensively throughout the text.
The main book topic in the 3rd edition is the growth argument, which is an expansion of the original “A policy for economic growth” book. The expansion deals with additional policy options that are available when a nation is pursuing its economic objectives. These additional policy options include transfer payments and various forms of consumption expenditure. The additional policy areas are described in detail throughout the text.
The book does not change the basic idea that economic policies can have divergent or zero effect impacts on economic growth. It continues to argue that economic policies can have positive, significant, or zero effects on economic growth. However, it also recognizes that economic policies have a direct impact on growth, even when they are not implemented directly. The book explores three broad categories of indirect effects of economic policies: policy-related effects, indirect policy-related effects, and exogenous policy-related effects. Policy-related effects refers to policy restrictions that are designed to restrict economic activity.
One new argument highlighted in the 3rd edition is that economic policies can actually stimulate economic growth at a slower rate than the economy might have grown without the intervention. The argument is based on the argument that fiscal policy can indeed drive economic growth, albeit at a slower rate than . . . . . . growth rates would naturally be generated by domestic financial conditions. This can be illustrated with the observation that during periods when fiscal policy is restraining economic growth (as it has done in recent years), the level of growth in output is lower than it would have been. The implication is that the restraint in fiscal policy is having an effect on output and, by driving down output, this also reduces the need for domestic fiscal policy to curtail spending. If this were the case, then one could argue that fiscal policy is not being constrained by a fundamental constraint of the state of the economy, namely excess capacity, and so can actually stimulate economic growth at a higher level than might otherwise be the case.
There are two related arguments presented in the 3rd Edition of A Theory of Economic Growth that are discussed in greater detail in the text. The first argument makes use of the theory of demand formation to explain the impact of economic policies on economic growth. According to this theory, the degree of demand is determined by the availability of relevant information. Policies that are economically rational in the long run will boost demand, while those that are not will reduce demand. It follows that economic growth will tend to be driven by policies that increase the level of available information, with the supply side of the equation providing the stimulus.