Economic Analysis and Law: The Economics of the Courtroom, 1st Edition (Paperback) book cover

Economic Analysis and Law

The Economics of the Courtroom, 1st Edition

By Christopher E.S. Warburton


488 pages | 70 B/W Illus.

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Paperback: 9780367361204
pub: 2020-06-19
Available for pre-order. Item will ship after 19th June 2020
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pub: 2020-06-19
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A comprehensive presentation of the use of economics in judicial decisions, the book is structured to provide all of the foundational concepts that are important for the application of economics to the development and interpretation of statutes that emanate from economic conditions.

The diversity of the economic field defines the scope of the book and its relevance to the study of law and rule adjudication. Beyond the positive dimensions of law and economics, the book evaluates the normative aspects of law and economics when laws are imprecise, and markets are inefficient. The ethical scope of transactions and rule adjudication are further considered in the context of professional ethics and the rationale for ethical considerations in the practice of law and economics. It presents a unique analysis of law, finance, and economics, by taking a look at the intricate quantitative requirements that are essential for scientific knowledge in the courtroom and the international dimensions of the practice of law and economics beyond municipal frontiers. It alerts entrepreneurs to risk exposures in the global economy and provides foundational information for readers who are also interested in international law and economics, and the essence and interpretations of international conventions appertaining to money, expropriation, the environment, and investments in international financial markets.

This book is a useful reference for both undergraduate and graduate students who are interested in law and economics, forensic economics, corporate white-collar crime, and legal studies. It is also valuable for certificate programs for paralegals who wish to have a basic understanding of economic and financial concepts.

Table of Contents


List of Tables and Figures



1 Microeconomic foundation


Microeconomic foundation


Normative v. positive law and economics


Economic models and markets


Market transactions and consumer class action litigation


Economic and judicial interpretations of consumer responsiveness to price changes


US Labor market and the Civil Rights Act of 1964


US labor law and economics of discrimination


Production cost and consumer welfare


2 Macroeconomics in forensic economics


Aggregate economic performance (the business cycle)


Forensic implications of [international] unemployment


Nominal and real interest rates


The inflation factor


Interest rates and inflation in courts of law


Open macroeconomics and exchange rate law


3 Corporate financial analysis and investment law


The interface of corporate finance and real economic performance

Laws of the Security and Exchange Commission


Financial statements


The Income Statement


The Balance Sheet


The statement of cash flow


Financial statements and securities regulation


Applications of SEC law


Securities trade and extraterritorial jurisdiction


The principal-agent problem


A case of abusive managerial discretion ? Dodge v. Ford Motor Company (204 Mich.

459 170 N.W. 668 (1919))


Managerial economics in Dodge v. Ford


Normative economics in Dodge v. Ford


The principal-agent struggle for control of public corporations


4 Innovation and expropriation of creative rights


Innovation and human rights


Ethical lapses and costs of IP expropriation


The economic consequences of innovation


Intellectual property law


5 Econometrics for the courtroom


Federal Rules of evidence and scientific requirements (the Daubert Standard)


The structure of data


Sampling strategies


Forecasting economic value


Ordinary least squares (OLS)


Time value of money


Litigating the discount rate


Annuities and amortization


The net present value of money


Putting it all together: The Mooresville Honda case and worklife expectancy


Chi square analysis


The Intrinsic Value of Public Companies


6 Tax avoidance and evasion


Types of taxpayers


The economics and laws of taxation


The US tax gap


Theories of tax avoidance and evasion


The tax court system of the US


Tax flight and the Foreign Account Tax Compliance Act (FATCA)


7 US Antitrust law and enforcement


The evolution of US antitrust law


The Sherman Act (1890)


The Clayton Act (1914)


The Federal Trade Commission (FTC) Act (1914)


The Robinson-Patman Act (1936)


The Wheller-Lea Act (1938)


The Cellar-Kefauver Act (1950)


The Williams Act (1968)

The Hart-Scott-Rodino (HSR) Act (1976)


The development of mergers and acquisitions (merger waves)


Measuring Market Concentration: The Herfindahl-Hirschman and Lerner Indices


Innovation, tying, and monopolization: Antitrust law and the Microsoft case


Estimating antitrust damages


8 International economics in international courts of law


The sources of international law


Trade theories as foundations of international trade law


Trade Restrictions with partial equilibrium analysis (subsidies and tariffs)


International trade law


Infant Industry Protection (Art. XIII)


Dumping (Art.VI, Anti-Dumping Agreement, and Agreement to Implement)


Balance of payments stability and quantitative restrictions (Art. XII)


Nondiscrimination, quotas, and exemptions (Arts. I, XIII and XIV)


Regional Trade Agreements (RTAs) (Arts. XXIV and I)


Agreement on Subsidies and Countervailing Measures (SCM) (Art. XVI and SCM)


The WTO’s Dispute Settlement Understanding (DSU)


Applications of economic law to trade disputes

Export Subsidy



Discriminatory market access


Monetary economics and international law: The confiscatory effects of currency

devaluation or manipulation of value


Customary and conventional monetary law


The limits of monetary "sovereignty": contractual monetary arrangements


Obligations Regarding Exchange Arrangements (Art. IV)


Surveillance over exchange arrangements (Art. IV §3)


Waiver conditions (Art.V §4)


Ineligibility to use the Fund’s general resources (Art. V § 5)


Interpretation of the Articles of Agreement (Art. XXIX)


Applications of monetary law: no contrived confiscation


Long-term foreign investment and foreign investment laws


The International law of foreign direct investment (FDI)


National Treatment (OECD Guidelines: Declaration II-4)


International Investment Incentives and Disincentives (OECD Guidelines

Declaration: IV. 1-3)


Concepts and principles


General policies (OECD Guidelines II


The taking of foreign property (international law of expropriation and confiscation)


The Aminoil Case


Sovereignty over national resources and nationalization


Table of cases



About the Author

Christopher Warburton is an international economist, he currently teaches economics at East Stroudsburg University in Pennsylvania, U.S.

Subject Categories

BISAC Subject Codes/Headings:
BUSINESS & ECONOMICS / Economics / Microeconomics
BUSINESS & ECONOMICS / Economics / General
LAW / Jurisprudence
LAW / Legal Education