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Sustainability and Welfare Policy in European Market Economies


Edited By Jürgen Plöhn and George Chobanov

The articles in this volume are selected from the contributions to two international conferences. Authors and teams tackle general economic approaches and developments with respect to new concepts for the production possibility frontier, the connection of development and exports diversification and improvements to the business process. Other contributors address economic sustainability with respect to an institutional path to sustainable growth, available financial instruments, behavioral models of economic expectations, solutions for waste treatment as well as to technological aspects related to security, privacy and IT governance. Finally, a third group of authors discusses health policy in the EU and postsecondary education in Bulgaria as aspects of public welfare.

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Production Possibility Frontier: New Concepts for Post-Crisis Economics Textbooks (Henrik Egbert / Nadeem Naqvi / Teodor Sedlarski)


Henrik Egbert / Nadeem Naqvi / Teodor Sedlarski

(Anhalt University of Applied Sciences, Bernburg, Germany – KIMEP University, Almaty, Kazakhstan – Sofia University “St. Kliment Ohridski”, Sofia, Bulgaria)

Production Possibility Frontier: New Concepts for Post-Crisis Economics Textbooks

Abstract: The crisis of 2008 has shown that some economic models do not provide reliable guidance for economic policy. As a result, a discussion on what to teach in economics has started within the discipline. This paper contributes to this discourse by referring to the model of the Production Possibility Frontier (PPF) used in principles courses in economics. The authors show how the model of the PPF can be used for teaching economics beyond neoclassical standard assumptions. We introduce endogenous change and transaction costs in the model, in this way making it more applicable and effective in teaching economic policy.

1. Introduction

The economic crisis of 2008 hit the world economy with remarkable vigor. Initially, economic policy fell short of providing guidance how to react on the crisis. A consequence of this was that some economists started to call into question economic models and theories, which have been taught for decades. The main reasons were that, firstly, the crisis was not, by and large, predicted and, secondly, that it was hard to figure out suitable economic advice for politicians in order to implement a remedy for causes of the crisis.

Consequently, the question which models and theories should be taught was articulated (Blinder...

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