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Books (by John Bogle)

• Bogle on Mutual Funds: New Perspectives for the Intelligent Investor (McGraw-Hill, 1993), ISBN 1-55623-860-6
• Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor (John Wiley & Sons, 1999), ISBN 0-471-39228-6
• John Bogle on Investing: The First 50 Years (McGraw-Hill, 2000), ISBN 0-07-136438-2
• Character Counts: The Creation and Building of The Vanguard Group (McGraw-Hill, 2002) ISBN 0-07-139115-0
• The Battle for the Soul of Capitalism (Yale University Press, 2005), ISBN 0-300-10990-3
• The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (John Wiley & Sons, 2007), ISBN 978-0-470-10210-7
• Enough : True Measures of Money, Business, and Life (John Wiley & Sons, 2008), ISBN 978-0470398517

Selected publications (by John Templeton)

• Riches for the Mind and Spirit: John Marks Templeton's Treasury of Words to Help, Inspire, and Live By, 2006. ISBN 1-5994-7101-9
• Faithful Finances 101: From The Poverty Of Fear And Greed To The Riches Of Spiritual Investing, 2005. ISBN 1-9320-3175-8
• Golden Nuggets from Sir John Templeton, 1997. ISBN 1-8901-5104-1
• Discovering the Laws of Life, 1994. ISBN 0-8264-0861-3
• Is God the Only Reality? Science Points to a Deeper Meaning of the Universe, 1994. ISBN 0-8264-0650-5
• Templeton Plan: 21 Steps to Personal Success and Real Happiness, 1992. ISBN 0-0610-4178-5
• The humble approach: Scientists discover God, 1981. ISBN 0-8164-0481-X
• Worldwide Laws of Life: 200 Eternal Spiritual Principles, 1998. ISBN 1890151157.

Works (by Warren Buffett)

• The Essays of Warren Buffett : Lessons for Corporate America, Warren Buffett and Lawrence A. Cunningham, The Cunningham Group; revised edition (April 11, 2001), ISBN 978-0966446111
• The Essays of Warren Buffett: Lessons for Corporate America, Second Edition, Warren E. Buffett and Lawrence A. Cunningham, The Cunningham Group; 2nd edition (April 14, 2008), ISBN 978-0966446128

Books for a general audience (by Paul Krugman)

• The Return of Depression Economics and the Crisis of 2008 (December 2008) ISBN 0393071014
  • An updated version of his previous work.
• The Conscience of a Liberal (October 2007) ISBN 0393060691
• The Great Unraveling: Losing Our Way in the New Century (September 2003) ISBN 0393058506
  • A book of his New York Times columns, many deal with the economic policies of the Bush administration or the economy in general.
• Fuzzy Math: The Essential Guide to the Bush Tax Plan (May 4, 2001) ISBN 0393050629
• The Return of Depression Economics (May 1999) ISBN 039304839X
  • Considers the long economic stagnation of Japan through the 1990s, the Asian financial crisis, and problems in Latin America.
  • The Return of Depression Economics and the Crisis of 2008 (December 2008) ISBN 0393071014
• The Accidental Theorist and Other Dispatches from the Dismal Science (May 1998) ISBN 0393046389
  • Essay collection, primarily from Krugman's writing for Slate.
• Pop Internationalism (March 1996) ISBN 0262112108
  • Essay collection, covering largely the same ground as Peddling Prosperity.
• Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations (April 1995) ISBN 0393312925
  • History of economic thought from the first rumblings of revolt against Keynesian economics to the present, for the layman.
• The Age of Diminished Expectations: U.S. Economic Policy in the 1990s (1990) ISBN 026211156X
  • A "briefing book" on the major policy issues around the economy.
  • Revised and Updated, January 1994, ISBN 0262610922
  • Third Edition, August 1997, ISBN 0262112248

The current state of monetarism

Since 1990, the classical form of monetarism has been questioned because of events which many economists have interpreted as being inexplicable in monetarist terms, namely the unhinging of the money supply growth from inflation in the 1990s and the failure of pure monetary policy to stimulate the economy in the 2001-2003 period. Alan Greenspan, former chairman of the Federal Reserve, argued that the 1990s decoupling was explained by a virtuous cycle of productivity and investment on one hand, and a certain degree of "irrational exuberance" in the investment sector. Economist Robert Solow of MIT suggested that the 2001-2003 failure of the expected economic recovery should be attributed not to monetary policy failure but to the breakdown in productivity growth in crucial sectors of the economy, most particularly retail trade. He noted that five sectors produced all of the productivity gains of the 1990s, and that while the growth of retail and wholesale trade produced the smallest growth, they were by far the largest sectors of the economy experiencing net increase of productivity. "2% may be peanuts, but being the single largest sector of the economy, that's an awful lot of peanuts."

There are also arguments which link monetarism and macroeconomics, and treat monetarism as a special case of Keynesian theory. The central test case over the validity of these theories would be the possibility of a liquidity trap, like that experienced by Japan. Ben Bernanke, Princeton Professor and current Chairman of the US Federal Reserve, has argued that monetary policy could respond to zero interest rate conditions by direct expansion of the money supply in his words "We have the keys to the printing press, and we are not afraid to use them." Another popular economist, Paul Krugman, has advanced the counterargument that this would have a corresponding devaluationary effect, like the sustained low interest rates of 2001-2004 produced against world currencies.

Historian David Hackett Fischer, in his study The Great Wave, questioned the implicit basis of monetarism by examining long periods of secular inflation that stretched over decades. In doing so, he produced data which suggests that prior to a wave of monetary inflation, there is a wave of commodity inflation, which governments respond to, rather than lead. Whether this formulation undermines the monetary data which underpins the fundamental work of monetarism is still a matter of contention.

Monetarists of the Milton Friedman school of thought believed in the 1970s and 1980s that the growth of the money supply should be based on certain formulations related to economic growth. As such, they can be regarded as advocates of a monetary policy based on a "quantity of money" target. This can be contrasted with the monetary policy advocated by supply side economics and the Austrian School which are based on a "value of money" target (albeit from different ends of the formula). Austrian economists criticise monetarism for not recognizing the citizens' subjective value of money and trying to create an objective value through supply and demand.

These disagreements, along with the role of monetary policy in trade liberalization, international investment, and central bank policy, remain lively topics of investigation and argument.

Two approaches (to welfare economics)

There are two mainstream approaches to welfare economics: the early Neoclassical approach and the New welfare economics approach.

The early Neoclassical approach was developed by Edgeworth, Sidgwick, Marshall, and Pigou. It assumes that:

• Utility is cardinal, that is, scale-measurable by observation or judgment.
• Preference is exogenously given and stable.
• Additional consumption provides smaller and smaller increases in utility (diminishing marginal utility).
• All individuals have interpersonally comparable utility functions (an assumption that Edgeworth avoided in his Mathematical 'Psychics).

With these assumptions, it is possible to construct a social welfare function simply by summing all the individual utility functions.

The New Welfare Economics approach is based on the work of Pareto, Hicks, and Kaldor. It explicitly recognizes the differences between the efficiency part of the discipline and the distribution part and treats them differently. Questions of efficiency are assessed with criteria such as Pareto efficiency and the Kaldor-Hicks compensation tests, while questions of income distribution are covered in social welfare function specification. Further, efficiency dispenses with cardinal measures of utility: ordinal utility, which merely ranks commodity bundles, such as represented by an indifference-curve map is adequate for this analysis.

Human rights (and Utilitarianism)

Utilitarians argue that justification of slavery, torture or mass murder would require unrealistically large benefits to outweigh the direct and extreme suffering to victims. Utilitarianism would also require the indirect impact of social acceptance of inhumane policies to be taken into consideration, and general anxiety and fear could increase for all if human rights are commonly ignored.

Act and rule utilitarians differ in how they treat human rights themselves. Under rule utilitarianism, a human right can easily be considered a moral rule. Act utilitarians, on the other hand, do not accept human rights as moral principles in and of themselves, but that does not mean that they reject them altogether: first, most act utilitarians, as explained above, would agree that acts such as enslavement and genocide always cause great unhappiness and very little happiness; second, human rights could be considered rules of thumb so that, although torture might be acceptable under some circumstances, as a rule it is immoral; and, finally, act utilitarians often support human rights in a legal sense because utilitarians support laws that cause more good than harm.

Temporary Term Insurance

Term assurance provides life insurance coverage for a specified term of years in exchange for a specified premium. The policy does not accumulate cash value. Term is generally considered "pure" insurance, where the premium buys protection in the event of death and nothing else.

There are three key factors to be considered in term insurance:

1. Face amount (protection or death benefit),
2. Premium to be paid (cost to the insured), and
3. Length of coverage (term).

Various insurance companies sell term insurance with many different combinations of these three parameters. The face amount can remain constant or decline. The term can be for one or more years. The premium can remain level or increase. A common type of term is called annual renewable term. It is a one year policy but the insurance company guarantees it will issue a policy of equal or lesser amount without regard to the insurability of the insured and with a premium set for the insured's age at that time. Another common type of term insurance is mortgage insurance, which is usually a level premium, declining face value policy. The face amount is intended to equal the amount of the mortgage on the policy owner’s residence so the mortgage will be paid if the insured dies.

A policy holder insures his life for a specified term. If he dies before that specified term is up, his estate or named beneficiary receives a payout. If he does not die before the term is up, he receives nothing. In the past these policies would almost always exclude suicide. However, after a number of court judgments against the industry, payouts do occur on death by suicide (presumably except for in the unlikely case that it can be shown that the suicide was just to benefit from the policy). Generally, if an insured person commits suicide within the first two policy years, the insurer will return the premiums paid. However, a death benefit will usually be paid if the suicide occurs after the two year period.

Conflicts of interest generally (unrelated to the practice of law)

More generally, conflicts of interest can be defined as any situation in which an individual or corporation (either private or governmental) is in a position to exploit a professional or official capacity in some way for their personal or corporate benefit.

Depending upon the law or rules related to a particular organization, the existence of a conflict of interest may not, in and of itself, be evidence of wrongdoing. In fact, for many professionals, it is virtually impossible to avoid having conflicts of interest from time to time. A conflict of interest can, however, become a legal matter for example when an individual tries (and/or succeeds in) influencing the outcome of a decision, for personal benefit. A director or executive of a corporation will be subject to legal liability if a conflict of interest breaches his Duty of Loyalty.

There often is confusion over these two situations. Someone accused of a conflict of interest may deny that a conflict exists because he/she did not act improperly. In fact, a conflict of interest can exist even if there are no improper acts as a result of it. (One way to understand this is to use the term "conflict of roles". A person with two roles—an individual who owns stock and is also a government official, for example—may experience situations where those two roles conflict. The conflict can be mitigated—see below—but it still exists. In and of itself, having two roles is not illegal, but the differing roles will certainly provide an incentive for improper acts in some circumstances.)

Incentive in economics

The study of economics in modern societies is mostly concerned with remunerative incentives rather than moral or coercive incentives — not because the latter two are unimportant, but rather because remunerative incentives are the main form of incentives employed in the world of business, whereas moral and coercive incentives are more characteristic of the sorts of decisions studied by political science and sociology. A classic example of the economic analysis of incentive structures is the famous Walrasian chart of supply and demand curves: economic theory predicts that the market will tend to move towards the equilibrium price because everyone in the market has a remunerative incentive to do so: by lowering a price formerly set above the equilibrium a firm can attract more customers and make more money; by raising a price formerly set below the equilibrium a customer is more able to obtain the good or service that she wants in the quantity she desires.

A strong incentive is one that accomplishes the stated goal. If the goal is to maximize production, then a strong incentive will be one that encourages workers to produce goods at full capacity. A weak incentive is any incentive below this level.

Incentives help people to make the right decision, or the one one would like them to make. In order to accomplish things you want done in economics you must give the consumer or the producer incentives, with out them they would have no reason to do what you ask.

(Tax) Excises

Main article: Excise

Unlike an ad valorem, an excise is not a function of the value of the product being taxed. Excise taxes are based on the quantity, not the value, of product purchased. For example, in the United States, the Federal government imposes an excise tax of 18.4 cents per U.S. gallon (4.86¢/L) of gasoline, while state governments levy an additional 8 to 28 cents per U.S. gallon. Excises on particular commodities are frequently hypothecated. For example, a fuel excise (use tax) is often used to pay for public transportation, especially roads and bridges and for the protection of the environment. A special form of hypothecation arises where an excise is used to compensate a party to a transaction for alleged uncontrollable abuse; for example, a blank media tax is a tax on recordable media such as CD-Rs, whose proceeds are typically allocated to copyright holders. Critics charge that such taxes blindly tax those who make legitimate and illegitimate usages of the products; for instance, a person or corporation using CD-R's for data archival should not have to subsidize the producers of popular music.

Excises (or exemptions from them) are also used to modify consumption patterns (social engineering). For example, a high excise is used to discourage alcohol consumption, relative to other goods. This may be combined with hypothecation if the proceeds are then used to pay for the costs of treating illness caused by alcohol abuse. Similar taxes may exist on tobacco, pornography, etc., and they may be collectively referred to as "sin taxes". A carbon tax is a tax on the consumption of carbon-based non-renewable fuels, such as petrol, diesel-fuel, jet fuels, and natural gas. The object is to reduce the release of carbon into the atmosphere. In the United Kingdom, vehicle excise duty is an annual tax on vehicle ownership.

(Education and) Economics

Main article: Economics of education

It has been argued that high rates of education are essential for countries to be able to achieve high levels of economic growth. Empirical analyses tend to support the theoretical prediction that poor countries should grow faster than rich countries because they can adopt cutting edge technologies already tried and tested by rich countries. However, technology transfer requires knowledgeable managers and engineers who are able to operate new machines or production practices borrowed from the leader in order to close the gap through imitation. Therefore, a country's ability to learn from the leader is a function of its stock of "human capital." Recent study of the determinants of aggregate economic growth have stressed the importance of fundamental economic institutions and the role of cognitive skills.

At the individual level, there is a large literature, generally related back to the work of Jacob Mincer, on how earnings are related to the schooling and other human capital of the individual. This work has motivated a large number of studies, but is also controversial. The chief controversies revolve around how to interpret the impact of schooling.

Economists Samuel Bowles and Herbert Gintis famously argued in 1976 that there was a fundamental conflict in American schooling between the egalitarian goal of democratic participation and the inequalities implied by the continued profitability of capitalist production on the other.

Personal financial planning

A key component of personal finance is financial planning, a dynamic process that requires regular monitoring and reevaluation. In general, it has five steps:

1. Assessment: One's personal financial situation can be assessed by compiling simplified versions of financial balance sheets and income statements. A personal balance sheet lists the values of personal assets (e.g., car, house, clothes, stocks, bank account), along with personal liabilities (e.g., credit card debt, bank loan, mortgage). A personal income statement lists personal income and expenses.
2. Setting goals: Two examples are "retire at age 65 with a personal net worth of $1,000,000" and "buy a house in 3 years paying a monthly mortgage servicing cost that is no more than 25% of my gross income". It is not uncommon to have several goals, some short term and some long term. Setting financial goals helps direct financial planning.
3. Creating a plan: The financial plan details how to accomplish your goals. It could include, for example, reducing unnecessary expenses, increasing one's employment income, or investing in the stock market.
4. Execution: Execution of one's personal financial plan often requires discipline and perseverance. Many people obtain assistance from professionals such as accountants, financial planners, investment advisers, and lawyers.
5. Monitoring and reassessment: As time passes, one's personal financial plan must be monitored for possible adjustments or reassessments.

Typical goals most adults have are paying off credit card and or student loan debt, retirement, college costs for children, medical expenses, and estate planning.

The six key areas of personal financial planning, as suggested by the Financial Planning Standards Board, are:

1 - Financial Position: this area is concerned with understanding the personal resources available by examining net worth and household cash flow. Net worth is a person's balance sheet, calculated by adding up all assets under that person's control, minus all liabilities of the household, at one point in time. Household cash flow totals up all the expected sources of income within a year, minus all expected expenses within the same year. From this analysis, the financial planner can determine to what degree and in what time the personal goals can be accomplished.

2 - Adequate Protection: the analysis of how to protect a household from unforeseen risks. These risks can be divided into liability, property, death, disability, health and long term care. Some of these risks may be self-insurable, while most will require the purchase of an insurance contract. Determining how much insurance to get, at the most cost effective terms requires knowledge of the market for personal insurance. Business owners, professionals, athletes and entertainers require specialized insurance professionals to adequately protect themselves. Since insurance also enjoys some tax benefits, utilizing insurance investment products may be a critical piece of the overall investment planning.

3 - Tax Planning: typically the income tax is the single largest expense in a household. Managing taxes is not a question of if you will pay taxes, but when and how much. Government gives many incentives in the form of tax deductions and credits, which can be used to reduce the lifetime tax burden. Most modern governments use a progressive tax. Typically, as your income grows, you pay a higher marginal rate of tax. Understanding how to take advantage of the myriad tax breaks when planning your personal finances can make a significant impact upon your success.

4 - Investment and Accumulation Goals: planning how to accumulate enough money to acquire items with a high price is what most people consider to be financial planning. The major reasons to accumulate assets is for the following: a - purchasing a house b - purchasing a car c - starting a business d - paying for education expenses e - accumulating money for retirement, to generate a stream of income to cover lifestyle expenses.

Achieving these goals requires projecting what they will cost, and when you need to withdraw funds. A major risk to the household in achieving their accumulation goal is the rate of price increases over time, or inflation. Using net present value calculators, the financial planner will suggest a combination of asset earmarking and regular savings to be invested in a variety of investments. In order to overcome the rate of inflation, the investment portfolio has to get a higher rate of return, which typically will subject the portfolio to a number of risks. Managing these portfolio risks is most often accomplished using asset allocation, which seeks to diversify investment risk and opportunity. This asset allocation will prescribe a percentage allocation to be invested in stocks, bonds, cash and alternative investments. The allocation should also take into consideration the personal risk profile of every investor, since risk attitudes vary from person to person.

5 - Retirement Planning: retirement planning is the process of understanding how much it costs to live at retirement, and coming up with a plan to distribute assets to meet any income shortfall.

6 - Estate Planning: involves planning for the disposition of your asset when you die. Typically, there is a tax due to the state or federal government at your death. Avoiding these taxes means that more of your assets will be distributed to your heirs. You can leave your assets to family, friends or charitable groups.