What Are Legal Economics?
Law and economics, or “economic analysis of the law,” is the application of economic principles to analyze the effects of various laws on the individual and society at large. In other words, economic concepts (like scarcity of resources, supply, demand, market efficiency, and bargaining power) are used to explain the purpose and effects of various laws, to assess which legal rules are economically efficient, and to predict which legal concepts will be effective and which will not.
As early as the 18th century, Adam Smith (writer of “Wealth of Nations” and famous for coining the phrase “life, liberty, and property”) discussed the economic effects of mercantile laws. Many other political philosophers also saw an interplay between economics and law and wrote about it at great length, including the father of communism, Karl Marx. However, the idea of applying economic concepts directly to the analysis of laws in a non-market manner is a fairly new concept. Economic analysis of law is usually divided into positive and normative. Positive analysis of law uses economic analysis to predict the effects of various legal rules, often explaining the development of laws in terms of their economic efficiency. Normative law, on the other hand, goes further and actually makes policy recommendations based on the projected economic consequences of different legal approaches.
In the United States, the economic analysis of law has been had significant influence on policy makers and the legal system. Many well known judicial opinions have utilized various forms of economic analysis to express the basis for a decision. Some have criticized this approach, however, due to the fact that it may overlook the needs of the minority or individual, such as in questions of equal protection and human rights.
A number of interesting new forms of economic legal analysis are evolving everyday. For more information on economics and law, please refer to the resources below. Should you require the assistance of competent legal counsel in your area, visit our Law Firms page.
Economics Law - US
- Bureau of Economic Analysis
The Bureau of Economic Analysis (BEA) promotes a better understanding of the U.S. economy by providing the most timely, relevant, and accurate economic accounts data in an objective and cost-effective manner.
- Economic Development Administration
The Economic Development Administration (EDA) was established under the Public Works and Economic Development Act of 1965 (42 U.S.C. § 3121), as amended, to generate jobs, help retain existing jobs, and stimulate industrial and commercial growth in economically distressed areas of the United States. EDA assistance is available to rural and urban areas of the Nation experiencing high unemployment, low income, or other severe economic distress.
- Economic Research Service - US Department of Agriculture
The Economic Research Service is a primary source of economic information and research in the U.S. Department of Agriculture. With over 350 employees, ERS conducts a research program to inform public and private decisionmaking on economic and policy issues involving food, farming, natural resources, and rural development.
- Economics - Definition
Economics aims to explain how economies work and how economic agents interact. Economic analysis is applied throughout society, in business, finance and government, but also in crime, education, the family, health, law, politics, religion, social institutions, war, and science. The expanding domain of economics in the social sciences has been described as economic imperialism.
- Financial Stability
Today, our nation faces a severe financial crisis. It is a crisis of confidence, of capital, of credit and of consumer and business demand. Rather than providing the credit that allows new ideas to flourish into new jobs, or families to afford homes and autos, we have seen banks and other sources of credit freeze up – contributing to and potentially accelerating what already threatens to be a serious recession. Our Financial Stability Plan will help ensure that businesses with good ideas have the credit to grow and expand, and working families can get the affordable loans they need to meet their economic needs and power an economic recovery.
- National Bureau of Economic Research
Founded in 1920, the National Bureau of Economic Research is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works. The NBER is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.
- US Department of Commerce
The U.S. Department of Commerce has a broad mandate to advance economic growth and jobs and opportunities for the American people. It has cross cutting responsibilities in the areas of trade, technology, entrepreneurship, economic development, environmental stewardship and statistical research and analysis. The products and services the department provides touch the lives of Americans and American companies in many ways, including weather forecasts, the decennial census, and patent and trademark protection for inventors and businesses.
- US Economic Stimulus Plan - Council on Foreign Relations (CFR)
President Barack Obama took office in January 2009 facing the biggest global economic crisis since the Second World War. Obama and U.S. congressional leaders, mainly from the Democratic Party, crafted an economic stimulus package to confront the crisis.
- US Economy at a Glance
The Bureau of Labor Statistics (BLS) produces Economy at a Glance pages at the national, regional, state, and metropolitan area levels. The data displayed in these pages are assembled from different surveys and programs conducted by BLS. The Economy at a Glance pages are refreshed with current data every time any of the source programs releases new statistics. This typically occurs 7-9 times per month.
Economics Law - International
- Economic Commission for Africa (ECA)
The Economic Commission for Africa (ECA) was established by the Economic and Social Council (ECOSOC) of the United Nations (UN) in 1958 as one of the UN's five regional commissions. ECA's mandate is to promote the economic and social development of its member States, foster intra-regional integration, and promote international cooperation for Africa's development.
- European Commission - Economic and Financial Affairs
The Directorate-General for Economic and Financial Affairs (DG ECFIN) reports to the Commissioner for Economic and Monetary Affairs, Joaquín Almunia. It strives to improve the economic wellbeing of the citizens of the European Union, by developing and promoting policies that lead to sustainable economic growth, a high level of employment, stable public finances and financial stability.
- UK Economy at a Glance
his information sheet summarises key aspects of the UK economy. The factors covered are: * Overview of the UK economy * Economic growth * Exchange rates * Interest rates * Inflation * Foreign direct investment * Trade * Taxation * Major UK-owned companies * Labour environment.
- UN Economic and Social Commission for Western Asia (ESCWA)
ESCWA provides a framework for the formulation and harmonization of sectoral policies for member countries, a platform for congress and coordination, a home for expertise and knowledge, and an information observatory. ESCWA activities are coordinated with the divisions and main offices of the Headquarters of the United Nations, specialized agencies, and international and regional organizations, including the League of Arab States, the Organisation of the Islamic Conference, and the Gulf Cooperation Council.
- United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) is the regional development arm of the United Nations for the Asia-Pacific region. With a membership of 62 Governments, 58 of which are in the region, and a geographical scope that stretches from Turkey in the west to the Pacific island nation of Kiribati in the east, and from the Russian Federation in the north to New Zealand in the south, ESCAP is the most comprehensive of the United Nations five regional commissions. It is also the largest United Nations body serving the Asia-Pacific region with over 600 staff.
- United Nations Economic Commission for Europe (UNECE)
The United Nations Economic Commission for Europe (UNECE) major aim is to promote pan-European economic integration. To do so, UNECE brings together 56 countries located in the European Union, non-EU Western and Eastern Europe, South-East Europe and Commonwealth of Independent States (CIS) and North America. All these countries dialogue and cooperate under the aegis of the UNECE on economic and sectoral issues.
Organizations Related to Economics Law
- American Law and Economics Association
The American Law and Economics Association is dedicated to the advancement of economic understanding of law and related areas of public policy and regulation. Founded in 1991, the membership includes academic and practicing lawyers and economists. The Association holds an annual two-day meeting in May at which members present papers dealing with a wide variety of topics concerning the interrelation of law and economics. Since 1999, the Association has published the American Law and Economics Review, a refereed journal.
- Canadian Economics Association (CEA)
The Association has for its object the advancement of economic knowledge through the encouragement of study and research, the issuing of publications, and the furtherance of free and informed discussion of economic questions. The Association as such will not assume a partisan position upon any question of practical politics nor commit its members to any position thereupon.
- Economic Policy Institute (EPI)
The Economic Policy Institute, a nonprofit Washington D.C. think tank, was created in 1986 to broaden the discussion about economic policy to include the interests of low- and middle-income workers. Today, with global competition expanding, wage inequality rising, and the methods and nature of work changing in fundamental ways, it is as crucial as ever that people who work for a living have a voice in the economic discourse.
- European Association of Law and Economics (EALE)
The European Association of Law and Economics (EALE) is the institutional response to the increasing importance of the economic analysis of law in Europe EALE was founded in 1984 with the purpose of providing assistance to law and economics scholars and bringing their scholarship to a wider audience, including policy makers, legislators and judges. The annual conference of EALE has become an important forum for the exchange of research findings and ideas. EALE also arranges seminars jointly with other international organizations, as well as local activities in different countries.
- Moody's Economy
Moody's Economy.com, a division of Moody's Analytics, is a leading independent provider of economic, financial, country, and industry research designed to meet the diverse planning and information needs of businesses, governments, and professional investors worldwide. Our research has many dimensions: country analysis; financial markets; industrial markets; and regional markets. Moody's Economy.com information and services are used in a variety of ways, including strategic planning; product and sales forecasting; risk and sensitivity management; and as investment research.
- United Nations Economic and Social Council (ECOSOC)
ECOSOC was established under the United Nations Charter as the principal organ to coordinate economic, social, and related work of the 14 UN specialized agencies, functional commissions and five regional commissions. The Council also receives reports from 11 UN funds and programmes. The Economic and Social Council (ECOSOC) serves as the central forum for discussing international economic and social issues, and for formulating policy recommendations addressed to Member States and the United Nations system
Publications Related to Economics Law
- Economic News by CNN Money
Provides the latest news on Markets, Business, Economy and Personal Finance to name a few.
- International Economic Law and Policy Blog
This blog offers commentary on current developments and scholarship in the field of international economic law and policy. It was started in January 2006 by Joel Trachtman and WorldTradeLaw.net, and is managed by WorldTradeLaw.net One of our goals with this blog is to stimulate discussion of trade issues, and we welcome comments on the blog posts. However, we will delete comments that are profane, mean spirited, racist, sexist, or otherwise inappropriate.
- Journal of Law, Economics and Policy
The Journal of Law, Economics and Policy's mission is to publish and distribute two annual, innovative, thought-provoking journals on law, economics and policy. Each issue will comprise creative, original, ground-breaking articles that appeal to both academia and the practicing legal community.
- Supreme Court Economic Review
Supreme Court Economic Review is a faculty-edited, peer-reviewed, interdisciplinary series that applies world class economic and legal scholarship to the work of the Supreme Court of the United States. Contributions typically provide an economic analysis of the events that generated the Court's cases, its functioning as an organization, the reasoning the Court employs in reaching its decisions, and the societal impact of these verdicts. Beyond academic analysis, SCER contributors stimulate interest in the economic dimension of the Supreme Court and explore solutions for its manifold and complex problems.
- The White House Issues - Economy
President Obama’s central focus is on stimulating economic recovery and helping America emerge a stronger and more prosperous nation. The current economic crisis is the result of many years of irresponsibility, both in government and in the private sector. As we look toward the future, we must confront the many dimensions of this crisis while laying the foundation for a new era of responsibility and transparency.
Articles on HG.org Related to Economics Law
- How Criminal Justice Reform Is Changing the Political LandscapeThe government’s approach to criminal justice has changed dramatically in recent history. In 1994, President Bill Clinton led the charge in an effort to be “tough on crime” by passing the “Violent Crime Control and Law Enforcement Act of 1994.” There were many facets to the bill, but elements like the three strikes provision and increased incarceration led to overcrowding in jails.
- Texas Lawmakers to Look at Criminal Prosecution of People in Debt to Rent to Own CompaniesUsually, when an individual has a payment dispute with a business, the matter is ultimately settled in a civil court.
- Inadequate Road Signage Contributed to Accident – Can I Sue the City or State?Road construction and deterioration often affects drivers to the point that a car crash occurs, and the damage may be significant or include bodily harm which requires medical treatment. When there is inadequate warning or signs to explain the construction or other road problems, the individual may have a case against local government agencies or companies tasked with resolving the matter.
- Medical Marijuana: A Growing IndustryFor states where marijuana is legal as a medicinal alternative or the only necessary drug, the industry is growing far past what was estimated initially. The use of this substance for pain and other symptoms for ailments is widespread for the states that have legalized use, and the industry keeps growing based on the need for various substitutes to current pain medication.
- Domestic Products Preferred in Contracts with the Federal GovernmentDuring certain Presidential Administrations, there are certain preferences in domestic products for contracts awarded to businesses that work for or with the federal government. When these preferences are made, the business and employees have a greater responsibility to ensure that products, materials and resources are not outsourced but processed through domestic businesses and clients.
- What Are My Options When My Car Is a Lemon?Before you can exercise any of your rights under California's lemon laws, you must first make sure that your vehicle actually qualifies as a lemon.
- New Texas Legislation Provides Consumer Protections Concerning Freestanding ERsAs the Texas Tribune reports, a couple of pieces of legislation recently passed into law in Austin will provide considerable protection for Texas health care consumers with regard to freestanding emergency rooms. Freestanding emergency rooms are facilities, often located in strip shopping malls, which are not attached to any hospital.
- Active Duty Service Members – Where Should I File for Divorce?When someone is part of the armed forces, there are unique rules regarding the divorce process that apply to the servicemember and his or her spouse. Often individuals in the armed forces move frequently and may claim residency in a different state than where they are currently stationed. Servicemembers and their spouses may have additional places where they can file. Where they file can have a significant impact on their divorce.
- Nursing License Suspended Due to Disciplinary Action: Renewal with Legal AssistanceWhen a professional must go through a disciplinary meeting because an issue has arisen that causes his or her license suspension, he or she may require months of fighting this for the license renewal. It is important to understand how to progress through these processes and what this means for the nurse.
- Federal and State Agency Hearing Defense for San Diego EmployersEmployers in San Diego and across California face an ever-increasing landscape of employee based claims and litigation. Federal cases with the U.S. Department of Labor or U.S. Equal Opportunity Commission are often based upon violations of the Fair Labor Standards Act or FLSA or violations such as discrimination or wage discrimination in lower income jobs.
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