Regulation of Business and Financial Markets – READING GUIDE

Introduction

There is no traditional “textbook” for this course. It is suggested that you purchase the three texts listed below. You are encouraged to read freely in these three texts, to seek out the material relevant to the issues in the lectures and the discussions.

· The Economics of Public Issues by Roger Leroy Miller et. al.,  Addison Wesley:

· http://www.amazon.com/Economics-Public-Issues-18th/dp/0133022935/ref=sr_1_2?s=books&ie=UTF8&qid=1387828595&sr=1-2&keywords=the+economics+of+public+issues

· Capitalism and Freedom by Milton Friedman, Paperback – Any edition will do (first published February 1963) University of Chicago Press; ISBN: # 0-226-264-01-7

· http://www.amazon.com/Capitalism-Freedom-Anniversary-Milton-Friedman/dp/0226264211/ref=sr_1_1?s=books&ie=UTF8&qid=1314639343&sr=1-1

This Guide is designed to introduce you to the texts and to suggest some associations between the lessons and the reading material.

The Texts

· The Economics of Public Issues by Roger Leroy Miller et. al., 18^th edition, Addison Wesley, 2013, ISBN # 978-0133022933

This is our most widely used text. It is clearly written and very accessible. It consists of a series of chapter-long issues or “cases.” I suggest reading the relevant chapters once through before the lecture and discussion, once again after listening to the lecture and participating in the discussion and perhaps going over it before the tests.

· Capitalism and Freedom by Milton Friedman, Paperback - any edition (originally 1963) University of Chicago Press; ISBN: # 0-226-264-01-7

Milton Friedman is perhaps the most well-known economist of the 20^th century. He is also a political commentator of sorts. This book is a classic, worth reading and rereading over long periods of time. It is written in the time-honored tradition of British Liberal thought – the same ideas that inspired the founders of this nation. Not all students find it easy reading, but I urge you to persevere.

General Outline

Lesson	Contents	Reading guide	Notes.
Lesson 1	General Introduction: Basic principles.	Miller, Friedman.	Friedman provides the general background values for the course. In Miller various applicable chapters. Miller especially on Type I/II errors
Lesson 2	Elementary Regulation: Price controls, taxes, subsidies and quotas. Minimum wages, rent controls, salary caps.	Miller	The issues here are price-controls, taxes, subsidies, tariffs, free trade, prohibitions.
Lesson 3	Regulation of Monopoly: The development of anti-monopoly law in America. The current anti-trust environment.	Miller chapters on restriction to trade – chapters on international trade
Lesson 4	Occupational licensure: The economics of health care and other professions.	Friedman, Miller	Friedman’s chapter is the classic statement of this position. The Miller and Baetjer chapters provide applications to specific aspects.
Lesson 5	Regulation of Labor: anti-discrimination, equal pay and equal employment opportunity, labor safety laws, unemployment insurance, labor unions.	Friedman	Friedman’s chapter was written before the civil rights and affirmative action initiatives. There is a huge literature, but I elected not to burden you with extra material. The lecture will be your main guide.
Lesson 6	Regulation of Capital: the regulation of the monetary and financial sectors; the regulation of financial institutions, money, inflation and foreign currencies.	Lewin paper: Click Here	You need not read all of my paper – read it lightly to get an idea of the issues involved with inflation.
Lesson 7	Regulation of the use of the Natural Environment: The economics of the environment. Air pollution, hazardous materials, preservation of wildlife, depleteable resources. .	Miller – chapters on the environment	The lectures provides the essential framework. Think hard about the upstream-downstream problem and the Coase Theorem. The chapters provide some illustrative cases.