The Structure of Production

The Structure of Production (3rd Edition) New!

(NYU Press, 2015)

SoP3coverweb2A clash of economic theories continues to dominate into the twenty-first century. The battle lines are drawn between the Keynesian model of aggregate demand and consumer spending, and the supply-side model of capital investment and saving. Which best reflects the dynamics of the booming global economy? Does aggregate demand determine business activity, new technology, and job creation? Or is economic growth driven by the agents of supply-entrepreneurs, capitalists, and savers?

Since its release in 1990, The Structure of Production has been the underground bible for supply-side economics and Austrian macroeconomics, and an analytical tool to explain asset bubbles, commodity inflation, and financial instability. Mark Skousen provides a new introduction that updates his four-stage model with new statistical evidence, applications to textbooks, and historical interpretation. He broadens his industrial model into a universal goods-and-services model; updates his “total spending” statistic (now GRE); and applies his time-structural model to recent financial events and government policies. Skousen also introduces new diagrams and models to improve pedagogy in the classroom: the “natural” rate of interest hypothesis; a new micro model using the P&L income statement that explains downsizing, upsizing, and creative destruction dynamics in the global economy; and a pro-saving diagram as an alternative to Keynesian “paradox of thrift.”

Now with the U. S. government adopting a new quarterly statistic called Gross Output (GO), the most significance advance in national income accounting since gross domestic product (GDP) was developed in the 1940s, and was based on the Gross Domestic Expenditure statistic Mark Skousen developed and included in The Structure of Production. The announcement comes as a triumph for Mark Skousen, who advocated GO twenty-five years ago as an essential macroeconomic tool and a better way to measure the economy and the business cycle. Now it has become an official statistic issued quarterly by the Bureau of Economic Analysis at the U. S. Department of Commerce.

Table of Contents

1. Introduction: The Case for a New Macroeconomics
Part 1: The Structure of Production: A Historical Survey
2. The Theory of Production in Classical Economics
3. Hayek and the 1930s: A New Vision of Macroeconomics
4. Time and Production in the Post-Keynesian Era
Part 2: The Theoretical Framework
5. The Structure of Production: The Building Blocks
6. Time and the Aggregate Production Structure
7. Savings, Technology, and Economic Growth
8. The Theory of Commodity Money: Economics of Pure Gold Standard
9. Economics of a Fiat Money Standard: A Theory of the Business Cycle
Part 3: Applications
10. Implications for Government Economic Policy
11. Conclusions: The Future of Economic Theory and Research
About the Author

What They’re Saying About The Structure of Production

“The next economics will have to be centered on supply and the factors of production rather than being functions of demand. I’ve read Mark Skousen’s book twice, and it comes the closest to achieving this goal.”
—Peter F. Drucker, Claremont Graduate University

“Skousen’s Structure of Production should be a required text at our leading universities. The book masterfully juxtaposes the ideas of the ‘Austrians’ against mainstream economics yet it is balanced, fair, well written and clearly illustrated. It is an important book for students of economics and a treasure for academics.”
—John O. Whitney, Emeritus Professor in Management Practice at Columbia University

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