Economics is the branch of social science that studies the production, distribution, and consumption of goods and services. The social sciences comprise academic disciplines concerned with the study of the social life of human groups and individuals including Anthropology, Communication studies Distribution in Economics refers to the way total output or income is distributed among individuals or among the Factors of production ( labor, land The term economics comes from the Greek for oikos (house) and nomos (custom or law), hence "rules of the house(hold). Greek (el ελληνική γλώσσα or simply el ελληνικά — "Hellenic" is an Indo-European language, spoken today by 15-22 million people mainly "[1]
Modern economics developed out of the broader field of political economy in the late 19th century, owing to a desire to use an empirical approach more akin to the physical sciences. Political economy originally was the term for studying production buying and selling and their relations with law custom and government [2] A definition that captures much of modern economics is that of Lionel Robbins in a 1932 essay: "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses. Lionel Charles Robbins Baron Robbins (1898 - 2008 was a British economist and adherent to the Austrian School of Economics. Lionel Robbins ' Essay (1932 1935 2nd ed 158 pp sought to define more precisely economics as a science and to coax substantive implications "[3] Scarcity means that available resources are insufficient to satisfy all wants and needs. Scarcity (also called paucity) is the problem of Infinite human needs and Wants, in a world of Finite Resources In other In economic theory factors of production (or productive inputs) are the resources employed to produce goods and services Absent scarcity and alternative uses of available resources, there is no economic problem. The economic problem, sometimes called the fundamental economic problem, is one of the fundamental economic theories in the operation of any Economy. The subject thus defined involves the study of choices as they are affected by incentives and resources. Rational choice theory, also known as rational action theory, is a framework for understanding and often formally modeling social and economic behavior
Areas of economics may be divided or classified into various types, including:
- microeconomics and macroeconomics
- positive economics ("what is") and normative economics ("what ought to be")
- mainstream economics and heterodox economics
- fields and broader categories within economics. Microeconomics is a branch of Economics that studies how individuals households and firms and some states make decisions to allocate limited resources typically in markets Macroeconomics is a branch of Economics that deals with the performance structure and behavior of a national or regional Economy as a whole Positive economics is the branch of Economics that concerns the description and explanation of economic phenomena (Wong 1987 p Normative economics is the branch of Economics that incorporates value judgments (that is normative judgements about what the economy ought Mainstream economics is a loose term used to refer to the non- heterodox economics taught in prominent universities Heterodox economics refers to the approaches or schools of economic thought, that are considered outside of mainstream, that is orthodox economics Articles in economics journals are usually classified according to the system used by the Journal of Economic Literature (JEL
One of the uses of economics is to explain how economies, as economic systems, work and what the relations are between economic players (agents) in the larger society. An economy is the realized social system of production exchange distribution and consumption of goods and services of a country or other area In Economics, an agent is an actor in a model that (generally solves an optimization problem Methods of economic analysis have been increasingly applied to fields that involve people (officials included) making choices in a social context, such as crime,[4] education,[5] the family, health, law, politics, religion,[6] social institutions, and war. The Family, although recognized as fundamental from Adam Smith on received little systematic treatment in Economics before the 1950s Health economics is a branch of Economics concerned with issues related to scarcity in the allocation of Health and Health care. Law and Economics, or economic analysis of law is an approach to Legal theory that applies methods of Economics to law Public choice in economic theory is the use of modern Economic tools to study problems that are traditionally in the province of Political science. Institutional economics, known by some as Institutionalist political economy, focuses on understanding the role of human-made institutions in shaping economic behaviour [7]
In the beginning
Although discussions about production and distribution have a long history, economics in its modern sense as a separate discipline is conventionally dated from the publication of Adam Smith's The Wealth of Nations in 1776. Adam Smith ( baptised 16 June 1723 – 17 July 1790) was a Scottish moral philosopher and a pioneer of Political economy. An Inquiry into the Nature and Causes of the Wealth of Nations is the Magnum opus of the Scottish economist Adam Smith. [8] There Smith describes the subject in these practical and exacting terms:
- Political economy, considered as a branch of the science of a statesman or legislator, proposes two distinct objects: first, to supply a plentiful revenue or product for the people, or, more properly, to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services. It proposes to enrich both the people and the sovereign. [9]
Smith referred to the subject as 'political economy', but that term was gradually replaced in general usage by 'economics' after 1870. Political economy originally was the term for studying production buying and selling and their relations with law custom and government [10]
Basic concepts
Production possibilities, opportunity cost, and efficiency
Common problems among different types of economies include:
- what goods to produce and in what quantities (consumption or investment, private goods or public goods, meat or potatoes, etc. In Economics, a production-possibility frontier (PPF or “transformation curve” is a graph that shows the different rates of production of two goods Opportunity cost or economic opportunity loss is the value of a product forgone to produce or obtain Economic efficiency is used to refer to a number of related concepts An economic system is a System that involves the production, distribution and consumption of goods and services between An economy is the realized social system of production exchange distribution and consumption of goods and services of a country or other area In economics consumption is the primary motivating force in the wealth or utility maximizing paradigm Investment or investing is a term with several closely-related meanings in Business management, Finance and Economics, related to saving A private good is defined in Economics as a good that exhibits these properties Excludable - it is reasonably possible to prevent a class of In Economics, a public good is a good that is non-rivaled and non-excludable. )
- how to produce them (coal or nuclear power, how much and what kind of machinery, who farms or teaches, etc. )
- for whom to produce them, reflecting the distribution of income from output. Distribution in Economics refers to the way total output or income is distributed among individuals or among the Factors of production ( labor, land [11]
An analytical tool for addressing these problems is the production-possibility frontier (PPF). In Economics, a production-possibility frontier (PPF or “transformation curve” is a graph that shows the different rates of production of two goods In the simplest case an economy can produce just two goods. An economy is the realized social system of production exchange distribution and consumption of goods and services of a country or other area Then the PPF is a table or graph (as below) that shows the different quantities of the two goods. Technology and an endowment of productive inputs (such as land, capital, and prospective labour) are taken as given, which limits feasible total output. In economic theory factors of production (or productive inputs) are the resources employed to produce goods and services
Point A in the diagram for example, shows that FA of food and CA of computers can be produced when production is run efficiently. So can FB of food and CB of computers (point B). Each point on the curve shows a maximal potential total output for the economy, which is the maximum output of one good, given a feasible output quantity of the other good. In Economics, potential output (also referred to as "natural gross domestic product" refers to the highest level of real Gross Domestic Product
Scarcity is represented in the figure by people being willing but unable in the aggregate to consume beyond the PPF. Scarcity (also called paucity) is the problem of Infinite human needs and Wants, in a world of Finite Resources In other [12] If production of one good increases along the curve, production of the other good decreases, an inverse relationship. An inverse or negative relationship is a Mathematical relationship in which one Variable decreases as another increases This is because increasing output of one good requires transferring inputs to it from production of the other good, decreasing the latter. The slope of the curve at a point on it gives the trade-off between the two goods. Slope is used to describe the steepness incline gradient or grade of a straight line. A trade-off (or tradeoff) is a situation that involves losing one quality or aspect of something in return for gaining another quality or aspect It measures what an additional unit of one good costs in units forgone of the other good, an example of an opportunity cost. Opportunity cost has been described as expressing "the basic relationship between scarcity and choice. Opportunity cost or economic opportunity loss is the value of a product forgone to produce or obtain "[13] Along the PPF, scarcity means that choosing more of one good in the aggregate entails doing with less of the other good. Still, in a market economy, movement along the curve can also be described as the choice of the increased output being worth the cost to the agents. A market economy is a realized Social system based on the Division of labour in which the prices of Goods and Services are determined in a In Economics, utility is a measure of the relative satisfaction from or desirability of Consumption of various Goods and services.
By construction, each point on the curve shows productive efficiency in maximizing output for given total inputs. Productive efficiency occurs when the Economy is operating at its Production possibility frontier (PPF A point inside the curve, as at U, is feasible but represents production inefficiency (wasteful use of inputs), in that output of one or both goods could increase by moving in a northeast direction to a point on the curve. An example of such inefficiency might be from high unemployment during a business-cycle recession. Unemployment occurs when a person is available to work and currently seeking work but the person is without work. The term business cycle or economic cycle refers to the fluctuations of economic activity during its long term growth trend A recession is a contraction phase of the Business cycle. The U Being on the curve might still not fully satisfy allocative efficiency if it did not produce a mix of goods that consumers preferred. Allocative efficiency is a situation in which the limited resources of a firm are allocated in accordance with the wishes of Consumers An allocatively efficient economy [14]
Consistent with the common economic problems listed above, much applied economics in public policy is concerned with determining how the efficiency of an economy can be improved. Public policy is the body of fundamental principles that underpin the operation of legal systems in each state. [15] Recognizing the reality of scarcity and then figuring out how to organize society for the most efficient use of resources has been described as the "essence of economics," where the subject "makes its unique contribution. "[16]
Specialization, division of labour, and gains from trade
Specialization in production is a pervasive feature of economic organization. Division of labour or specialization is the specialization of cooperative labour in specific circumscribed tasks and roles intended to increase the Productivity In international trade the principle of comparative advantage refers to the fact that although one country may have an absolute disadvantage with another value can be created for both Gains from trade in Economics refers to net benefits to agents from voluntary trading with each other Its contribution to economic efficiency and technological progress has long been noted. It includes different types of output among farms, manufacturers, and service providers, economies, etc. A service is the non-material equivalent of a good. A service provision is an economic activity that does not result in Ownership, and this is what differentiates An economy is the realized social system of production exchange distribution and consumption of goods and services of a country or other area Among each of these production systems, there may be:
- a corresponding division of labour with each worker having a distinct occupation or doing a specialized task as part of the production effort,
- correspondingly different types of capital equipment and differentiated land uses. Division of labour or specialization is the specialization of cooperative labour in specific circumscribed tasks and roles intended to increase the Productivity In Economics, capital or capital Goods or real capital refers to items of extensive value Land in Economics comprises all naturally occurring resources whose supply is inherently fixed (i [17][18][19]
Adam Smith's Wealth of Nations (1776) notably discusses the benefits of the division of labour. An Inquiry into the Nature and Causes of the Wealth of Nations is the Magnum opus of the Scottish economist Adam Smith. How individuals can best apply their own labour or any other resource is a central subject in the first book of the series. Smith claimed that an individual would invest a resource, for example, land or labour, so as to earn the highest possible return on it. Consequently, all uses of the resource must yield an equal rate of return (adjusted for the relative riskiness of each enterprise). Otherwise reallocation would result. This idea, wrote George Stigler, is the central proposition of economic theory. George Joseph Stigler ( January 17, 1911 December 1, 1991) was a U French economist Turgot had made the same point in 1766. Anne-Robert-Jacques Turgot Baron de Laune, often referred to as Turgot ( 10 May 1727 &ndash 18 March 1781) was a French [20]
In more general terms, it is theorized that market incentives, including prices of outputs and productive inputs, select the allocation of factors of production by comparative advantage, that is, so that (relatively) low-cost inputs are employed to keep down the opportunity cost of a given type of output. Price in Economics and Business is the result of an exchange and from that trade we assign a numerical Monetary value to a good, In economic theory factors of production (or productive inputs) are the resources employed to produce goods and services In international trade the principle of comparative advantage refers to the fact that although one country may have an absolute disadvantage with another value can be created for both In Economics, a production-possibility frontier (PPF or “transformation curve” is a graph that shows the different rates of production of two goods In the process, aggregate output increases as a by product or by design. The invisible hand is a Metaphor coined by the Economist Adam Smith. In Economics and Game theory, mechanism design is the study of designing rules of a game or system to achieve a specific outcome even though each [21] Such specialization of production creates opportunities for gains from trade whereby resource owners benefit from trade in the sale of one type of output for other, more highly-valued goods. Gains from trade in Economics refers to net benefits to agents from voluntary trading with each other Trade is the willing exchange of goods, services, or both Trade is also called Commerce. A measure of gains from trade is the increased output (formally, the sum of increased consumer surplus and producer profits) from specialization in production and resulting trade. The term surplus is used in Economics for several related quantities [22][23][24]
Money
Money is a means of final payment for goods in most market economies and the unit of account in which prices are typically stated. Money is anything that is generally accepted as Payment for Goods and services and repayment of Debts. In Economics, the quantity theory of money is a theory emphasizing the Positive relationship of overall prices or the nominal value of expenditures to the Monetary policy is the process by which the Government, Central bank, or monetary authority of a country controls (i the Supply of Money, Money is anything that is generally accepted as Payment for Goods and services and repayment of Debts. A unit of account is a standard monetary unit of measurement of the market value/cost of goods services or assets It includes currency held by the nonbank public and checkable deposits. It has been described as a social convention, like language, useful to one largely because it is useful to others. As a medium of exchange, money facilitates trade. An economic transaction or Trade involves the voluntary exchange of goods and services between two or more entities Its economic function can be contrasted with barter (non-monetary exchange). Barter is a type of Trade in which goods or services are directly exchanged Given a diverse array of produced goods and specialized producers, barter may entail a hard-to-locate double coincidence of wants as to what is exchanged, say apples and a book. The coincidence of wants problem (often " double coincidence of wants" is an important category of Transaction costs that impose severe limitations on economies By comparison, money can reduce the transaction cost of exchange because of its ready acceptability. In Economics and related disciplines a transaction cost is a Cost incurred in making an economic exchange Then it is less costly for the seller to accept money in exchange, rather than what the buyer produces. [25]
At the level of an economy, theory and evidence are consistent with a positive relationship running from the total money supply to the nominal value of total output and to the general price level. An economy is the realized social system of production exchange distribution and consumption of goods and services of a country or other area In Economics, the quantity theory of money is a theory emphasizing the Positive relationship of overall prices or the nominal value of expenditures to the In Mathematics and Statistics, a positive or direct relationship is a relationship between two Variables in which they both increase or decrease In Economics, money supply, or money stock, is the total amount of money available in an Economy at a particular point in time The distinction between real versus nominal value occurs in many fields A price level is a hypothetical measure of overall prices for some set of goods and services in a given region during a given interval normalized relative to some For this reason, management of the money supply is a key aspect of monetary policy. In Economics, money supply, or money stock, is the total amount of money available in an Economy at a particular point in time Monetary policy is the process by which the Government, Central bank, or monetary authority of a country controls (i the Supply of Money, [26][27]
Supply and demand
The theory of demand and supply is an organizing principle to explain prices and quantities of goods sold and changes thereof in a market economy. Sao Paulo Stock Exchangejpg|thumb| Virtual market arena where buyer and seller are not present and trade via intemediates and electronical information In microeconomic theory, it refers to price and output determination in a perfectly competitive market. Microeconomics is a branch of Economics that studies how individuals households and firms and some states make decisions to allocate limited resources typically in markets In Neoclassical economics and Microeconomics, perfect competition describes a market in which no buyer or seller has Market power. This has served as a building block for modeling other market structures and for other theoretical approaches.
For a given market of a commodity, demand shows the quantity that all prospective buyers would be prepared to purchase at each unit price of the good. Demand is often represented using a table or a graph relating price and quantity demanded (see boxed figure). Demand theory describes individual consumers as "rationally" choosing the most preferred quantity of each good, given income, prices, tastes, etc. Consumer theory is a theory of Microeconomics that relates Preferences to consumer demand curves. Rational choice theory, also known as rational action theory, is a framework for understanding and often formally modeling social and economic behavior A term for this is 'constrained utility maximization' (with income as the "constraint" on demand). Consumer theory is a theory of Microeconomics that relates Preferences to consumer demand curves. Here, 'utility' refers to the (hypothesized) preference relation for individual consumers. In Economics, utility is a measure of the relative satisfaction from or desirability of Consumption of various Goods and services. Utility and income are then used to model hypothesized properties about the effect of a price change on the quantity demanded. The law of demand states that, in general, price and quantity demanded in a given market are inversely related. In other words, the higher the price of a product, the less of it people would be able and willing to buy of it (other things unchanged). la Cēterīs paribus is a Latin phrase literally translated as "with other things the same As the price of a commodity rises, overall purchasing power decreases (the income effect) and consumers move toward relatively less expensive goods (the substitution effect). Purchasing power is the amount of value of a good/services compared to the amount paid with a Currency. Consumer theory is a theory of Microeconomics that relates Preferences to consumer demand curves. Consumer theory is a theory of Microeconomics that relates Preferences to consumer demand curves. Other factors can also affect demand; for example an increase in income will shift the demand curve outward relative to the origin, as in the figure.
Supply is the relation between the price of a good and the quantity available for sale from suppliers (such as producers) at that price. Supply is often represented using a table or graph relating price and quantity supplied. Producers are hypothesized to be profit-maximizers, meaning that they attempt to produce the amount of goods that will bring them the highest profit. Supply is typically represented as a directly proportional relation between price and quantity supplied (other things unchanged). In other words, the higher the price at which the good can be sold, the more of it producers will supply. The higher price makes it profitable to increase production. At a price below equilibrium, there is a shortage of quantity supplied compared to quantity demanded. This pulls the price up. At a price above equilibrium, there is a surplus of quantity supplied compared to quantity demanded. This pushes the price down. The model of supply and demand predicts that for a given supply and demand curve, price and quantity will stabilize at the price that makes quantity supplied equal to quantity demanded. This is at the intersection of the two curves in the graph above, market equilibrium. In Economics, economic equilibrium is simply a state of the world where economic forces are balanced and in the absence of external influences the (equilibrium values of economic
For a given quantity of a good, the price point on the demand curve indicates the value, or marginal utility[28] to consumers for that unit of output. In Economics, the marginal utility of a good or of a service is the Utility of the specific use to which an agent would put a given increase It measures what the consumer would be prepared to pay for the corresponding unit of the good. The price point on the supply curve measures marginal cost, the increase in total cost to the supplier for the corresponding unit of the good. In Economics and Finance, marginal cost is the change in Total cost that arises when the quantity produced changes by one unit The price in equilibrium is determined by supply and demand. In a perfectly competitive market, supply and demand equate cost and value at equilibrium. In Neoclassical economics and Microeconomics, perfect competition describes a market in which no buyer or seller has Market power. [29]
Demand and supply can also be used to model the distribution of income to the factors of production, including labour and capital, through factor markets. Distribution in Economics refers to the way total output or income is distributed among individuals or among the Factors of production ( labor, land In economic theory factors of production (or productive inputs) are the resources employed to produce goods and services In a labour market for example, the quantity of labour employed and the price of labour (the wage rate) are modeled as set by the demand for labour (from business firms etc. Labour economics seeks to understand the functioning of the Market and dynamics for labour. for production) and supply of labour (from workers).
Demand and supply are used to explain the behavior of perfectly competitive markets, but their usefulness as a standard of performance extends to any type of market. Demand and supply can also be generalized to explain variables applying to the whole economy, for example, quantity of total output and the general price level, studied in macroeconomics. An economy is the realized social system of production exchange distribution and consumption of goods and services of a country or other area Real GDP is a macroeconomic measure of the size of an economy adjusted for price changes and inflation A price level is a hypothetical measure of overall prices for some set of goods and services in a given region during a given interval normalized relative to some Macroeconomics is a branch of Economics that deals with the performance structure and behavior of a national or regional Economy as a whole
Prices and quantities
In supply-and-demand analysis, price, the going rate of exchange for a good, coordinates production and consumption quantities. Price and quantity have been described as the most directly observable characteristics of a good produced for the market. [30] Supply, demand, and market equilibrium are theoretical constructs linking price and quantity. But tracing the effects of factors predicted to change supply and demand -- and through them, price and quantity -- is a standard exercise in applied microeconomics and macroeconomics. Microeconomics is a branch of Economics that studies how individuals households and firms and some states make decisions to allocate limited resources typically in markets Macroeconomics is a branch of Economics that deals with the performance structure and behavior of a national or regional Economy as a whole Economic theory can specify under what circumstances price serves as an efficient communication device to regulate quantity. [31] A real-world application might attempt to measure how much variables that increase supply or demand change price and quantity.
Elementary demand-and-supply theory predicts equilibrium but not the speed of adjustment for changes of equilibrium due to a shift in demand or supply. [32] In many areas, some form of "price stickiness" is postulated to account for quantities, rather than prices, adjusting in the short run to changes on the demand side or the supply side. This includes standard analysis of the business cycle in macroeconomics. The term business cycle or economic cycle refers to the fluctuations of economic activity during its long term growth trend Macroeconomics is a branch of Economics that deals with the performance structure and behavior of a national or regional Economy as a whole Analysis often revolves around causes of such price stickiness and their implications for reaching a hypothesized long-run equilibrium. Examples of such price stickiness in particular markets include wage rates in labour markets and posted prices in markets deviating from perfect competition. In economic theory imperfect competition is the competitive situation in any market where the conditions necessary for Perfect competition are not satisfied In Neoclassical economics and Microeconomics, perfect competition describes a market in which no buyer or seller has Market power.
Another area of economics considers whether markets adequately take account of all social costs and benefits. An externality is said to occur where there are significant social costs or benefits from production or consumption that are not reflected in market prices. In Economics, an externality is an impact on any party not directly involved in an economic decision For example, air pollution may generate a negative externality, and education may generate a positive externality (less crime, etc. ). Governments often tax and otherwise restrict the sale of goods that have negative externalities and subsidize or otherwise promote the purchase of goods that have positive externalities in an effort to correct the price distortions caused by these externalities. Distortions in Economics refers to conditions that (in theory create Economic inefficiency [33]
Marginalism
Marginalist economic theory, such as above, describes consumers as attempting to reach a most-preferred position, subject to constraints, including income and wealth. Marginalism is the use of Marginal concepts within Economics. Marginalism is the use of Marginal concepts within Economics. Income, refers to consumption opportunity gained by an entity within a specified time frame which is generally expressed in monetary terms In Economics and Business, Wealth of a person or nation is the value of Assets owned net of liabilities owed (to foreigners in the It describes producers as attempting to maximize profits subject to their own constraints (including demand for goods produced, technology, and the price of inputs). Thus, for a consumer, at the point where marginal utility of a good, net of price, reaches zero, further increases in consumption of that good stop. In Economics, the marginal utility of a good or of a service is the Utility of the specific use to which an agent would put a given increase Analogously, a producer compares marginal revenue against marginal cost of a good, with the difference as marginal profit. In Microeconomics, Marginal Revenue ( MR) is the extra revenue that an additional unit of product will bring In Economics and Finance, marginal cost is the change in Total cost that arises when the quantity produced changes by one unit At the point where the marginal profit reaches zero, further increases in production of the good stop. For movement to equilibrium and for changes in equilibrium, behavior also changes "at the margin" -- usually more-or-less of something, rather than all-or-nothing. Such analysis applies to not only quantity-price adjustment toward equilibrium in the supply-and-demnd model but to any variable that changes the marginal equilibirum conditions of an activity, whether resulting in a change of utility, revenue, or cost.
Related conditions and considerations apply more generally to any type of economic system, whether market-based or not, where there is scarcity. An economic system is a System that involves the production, distribution and consumption of goods and services between [34] The marginalist notion of opportunity cost is a device to measure the size of the trade-off between competing alternatives. Opportunity cost or economic opportunity loss is the value of a product forgone to produce or obtain Such costs, reflected in prices, are used for predicting responses to public-policy changes or disturbances in a market economy. Public policy is the body of fundamental principles that underpin the operation of legal systems in each state. A market economy is a realized Social system based on the Division of labour in which the prices of Goods and Services are determined in a They are also used for evaluating economic efficiency. Economic efficiency is used to refer to a number of related concepts Similarly, in a centrally planned economy, shadow-price relations must be satisfied for efficient use of resources. A planned economy or directed economy is an Economic system in which the Government or Workers' councils manages the Economy. Loosely the shadow price is the change in the objective value of the optimal solution of an optimization problem obtained by relaxing the Constraint by one unit [35] There shadow pricing can be used for modeling production units or sectors in relation to objectives of planners. [36]
Economic reasoning
Economics as a contemporary discipline relies on rigorous styles of argument,. Economic methodology is the study of methods usually Scientific method, in relation to Economics (Boland 1987 p Various methods and beliefs have influenced development of the subject. [37][38] Analysis may begin with a simple model that proposes the hypothesis of one variable to be explained by another variable. A hypothesis (from Greek) consists either of a suggested explanation for a phenomenon (an event that is observable or of a reasoned proposal suggesting a possible Often an economic hypothesis is only qualitative, not quantitative. Qualitative economics refers to representation and analysis of information about the direction of change (+ or - in some economic variable(s as related to change of some other economic That is, the hypothesis implies the direction of a change in one variable, not the size of the change, for a given change of another variable. . [39] For clarity of exposition, theory may proceed with an assumption of ceteris paribus, which means holding constant explanatory terms other than the one under consideration. la Cēterīs paribus is a Latin phrase literally translated as "with other things the same For example, the quantity theory of money predicts an increase in the nominal value of output from an increase in the money supply, ceteris paribus. In Economics, the quantity theory of money is a theory emphasizing the Positive relationship of overall prices or the nominal value of expenditures to the The distinction between real versus nominal value occurs in many fields In Economics, money supply, or money stock, is the total amount of money available in an Economy at a particular point in time Common objectives of economic analysis include formulating theories that, compared to competing theories, are at least as simple in information requirements, more precise in predictions, and more fruitful in generating additional research. [40]
Economic theory is open to criticisms that it relies on unrealistic, unverifiable, or highly simplified assumptions. An example is the assumption of profit maximization by business firms. Answers of businesspersons to questions about the factors affecting their decisions may show no such calculation. One methodological response invokes hypothesized implications, such as that a profit-maximizing firm would raise total price with an increase in the sales tax. If firms act as if they are trying to maximize profits, the assumption may be accepted, whatever businesspersons say they are doing. More generally, while unrealistic assumptions do not help an unsuccessful theory, many descriptive details might be irrelevant to the predictive success of the theory and omitted for that reason. [41][42] Still, unrealistic assumptions may challenge the epistemic status of economics as a science, even as concepts and models help explain economic phenomena. Epistemology (from Greek επιστήμη - episteme, "knowledge" + λόγος, " Logos " or theory of knowledge [43]
Expositions of economic reasoning often use two-dimensional graphs to illustrate theoretical relationships. At a higher level of generality, Paul Samuelson's treatise Foundations of Economic Analysis (1947) used mathematical methods to represent the theory, particularly as to maximizing behavioral relations of agents reaching equilibrium. Paul Anthony Samuelson (born May 15, 1915) is an American neoclassical Economist known for his contributions to many fields of Foundations of Economic Analysis is a book by Paul A Samuelson published in 1947 (Enlarged ed The book focused on examining the class of statements called operationally meaningful theorems in economics, which are theorems that can conceivably be refuted by empirical data. In Mathematics, a theorem is a statement proven on the basis of previously accepted or established statements [44]
Economic data, broadly or narrowly construed, may permit testing the theory, if the theory has empirical implications. Economic data are usually numerical Time-series, ie sets of data (covering periods of time for part or all of a single economy or the international A central concept in Science and the Scientific method is that all Evidence must be empirical, or empirically based that is dependent on evidence Statistical methods such as regression analysis can represent unknown random influences on the variable to be explained. Statistics is a mathematical science pertaining to the collection analysis interpretation or explanation and presentation of Data. In statistics regression analysis is a collective name for techniques for the modeling and analysis of numerical data consisting of values of a Dependent variable (response Practitioners use such methods to estimate the size, economic significance, and statistical significance ("signal strength") of the hypothesized relation(s) and to adjust for noise from other variables. In Statistics, a result is called statistically significant if it is unlikely to have occurred by Chance. By such means, a hypothesis may gain acceptance, although in a probabilistic, rather than certain, sense. Acceptance is provisional, dependent on the hypothesis surviving tests that expose it to rejection. Falsifiability (or "refutability" is the logical possibility that an assertion can be shown false by an observation or a physical experiment Use of commonly accepted methods need not produce a final conclusion or even a consensus on a particular question, given different tests, data sets, and prior beliefs. A data set (or dataset) is a collection of Data, usually presented in tabular form Here, criticism based on professional standards and non-replicability of results serve as further checks against bias, errors, and over-generalization,[45][38] although much economic research has been accused of being non-replicable, and prestigious journals have been accused of not facilitating replication through the provision of the code and data. In Engineering, Science, and Statistics, replication is the repetition of an Experimental condition so that the variability associated with the [46] Like theories, uses of test statistics are themselves open to critical analysis,[47][48][49] although critical commentary on papers in economics in prestigious journals such as the American Economic Review has declined precipitously in the past 40 years. The American Economic Review ( AER) is a Peer-reviewed journal of Economics published quarterly by the American Economic Association. [50] This has been attributed to journals' incentives to maximize citations in order to rank higher on the Social Science Citation Index (SSCI). [51] Deirdre McCloskey, a longstanding critic of economics, claims that her criticisms have gone largely unheard over the years,[52] although her contention is controversial. Deirdre N McCloskey (born in 1942 as Donald N McCloskey) is an American Economics Professor. The McCloskey critique refers to a critique of post-1940s "official modernist" methodology in Economics, inherited from Logical positivism in philosophy [53]
In recent decades, the use of experimental methods in economics, including controlled experiments, has greatly expanded. Experimental economics is a the application of experimental methods to study economic questions Scientific controls allow Experiments to study one Variable at a time and are a vital part of the Scientific method. This has removed one long-noted distinction of some natural sciences from economics and allowed more direct tests of what were previously taken as axioms. In Science, the term natural science refers to a naturalistic approach to the study of the Universe, which is understood as obeying rules or law of [54][55] Development of theories, data, and methods have transformed some assumptions into testable models. An example is the assumption of narrowly selfish preferences versus a model that tests for selfish, altruistic, and cooperative preferences. [56][57]
Other fields commonly described as sciences use methods similar to those above. Science (from the Latin scientia, meaning " Knowledge " or "knowing" is the effort to discover, and increase human understanding Their widespread use in economics underlies an argument that economics is a "genuine science. ". [58] Still, critics have challenged the net gains. For example, Friedrich Hayek in his 1974 Nobel Prize lecture attributed policy failures in economic advising to an uncritical and unscientific propensity to imitate procedures used in the physical sciences. Friedrich August von Hayek CH ( May 8, 1899 March 23, 1992) was an Austrian British Economist The Nobel Memorial Prize in Economic Sciences, officially named The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (Sveriges riksbanks pris i ekonomisk He argued that even much-studied economic phenomena, such as labor-market unemployment, are inherently more complex than their counterparts in the physical sciences where such methods were earlier formed. Unemployment occurs when a person is available to work and currently seeking work but the person is without work. Similarly, theory and data are often very imprecise and lend themselves only to the direction of a change needed, not its size. [59] In part because of criticism, economics has undergone a thorough cumulative formalization and elaboration of concepts and methods since the 1940s, some of which have been toward application of the hypothetico-deductive method to explain real-world phenomena. See also Falsifiability The hypothetico-deductive model, or method is a proposed description of Scientific method. [60] An example of the latter is the extension of microeconomic analysis to seemingly non-economic areas, sometimes called economic imperialism. [58][61]
Areas and classifications in economics
Economics is one social science among several but has fields bordering on other areas, including economic geography, economic history, public choice, cultural economics, and institutional economics. The social sciences comprise academic disciplines concerned with the study of the social life of human groups and individuals including Anthropology, Communication studies Economic geography is the study of the location distribution and spatial organization of economic activities across the Earth. Economic history is the study of how economic phenomena evolved in the past Public choice in economic theory is the use of modern Economic tools to study problems that are traditionally in the province of Political science. Articles in economics journals are usually classified according to the system used by the Journal of Economic Literature (JEL Institutional economics, known by some as Institutionalist political economy, focuses on understanding the role of human-made institutions in shaping economic behaviour
One division of the subject distinguishes two types of economics. Positive economics ("what is") seeks to explain economic phenomena or behavior. Positive economics is the branch of Economics that concerns the description and explanation of economic phenomena (Wong 1987 p Normative economics ("what ought to be," usually as to public policy) prioritizes choices and actions by some set of criteria; such priorities reflect value judgments, including selection of the criteria. Normative economics is the branch of Economics that incorporates value judgments (that is normative judgements about what the economy ought
Another distinction is between mainstream economics and heterodox economics. One broad characterization describes mainstream economics as dealing with the "rationality-individualism-equilibrium nexus" and heterodox economics as defined by a "institutions-history-social structure nexus. Mainstream economics is a loose term used to refer to the non- heterodox economics taught in prominent universities Heterodox economics refers to the approaches or schools of economic thought, that are considered outside of mainstream, that is orthodox economics "[62]
The JEL classification codes of the Journal of Economic Literature provide a comprehensive, detailed way of classifying and searching for economics publiications by subject matter. Articles in economics journals are usually classified according to the system used by the Journal of Economic Literature (JEL The Journal of Economic Literature (JEL is a leading Economic Journal published by the American Economic Association. An alternative classification of often-detailed entries by mutually-exclusive categories and subcategories is The New Palgrave: A Dictionary of Economics. The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman [63]
Analysis of the economy
Areas of economics may be classified in various ways, but an economy is usually analyzed by use of microeconomics or macroeconomics. An economy is the realized social system of production exchange distribution and consumption of goods and services of a country or other area
Microeconomics
Microeconomics examines the economic behavior of agents (including individuals and firms) and their interactions through individual markets, given scarcity and government regulation. Microeconomics is a branch of Economics that studies how individuals households and firms and some states make decisions to allocate limited resources typically in markets In Economics, an agent is an actor in a model that (generally solves an optimization problem This article is for the legal term For regulation of genes see Regulation of gene expression. A given market might be for a product, say fresh corn, or the services of a factor of production, say bricklaying. In economic theory factors of production (or productive inputs) are the resources employed to produce goods and services The theory considers aggregates of quantity demanded by buyers and quantity supplied by sellers at each possible price per unit. In Statistics, aggregate data describes data combined from several measurements It weaves these together to describe how the market may reach equilibrium as to price and quantity or respond to market changes over time. This is broadly termed demand-and-supply analysis. Supply and demand is an Economic model describing effects on price and quantity in a Market. Market structures, such as perfect competition and monopoly, are examined as to implications for behavior and economic efficiency. In Neoclassical economics and Microeconomics, perfect competition describes a market in which no buyer or seller has Market power. In Economics, a monopoly (from Greek monos, alone or single + polein, to sell exists when a specific individual or enterprise has sufficient Economic efficiency is used to refer to a number of related concepts Analysis of change in a single market often proceeds from the simplifying assumption that behavioral relations in other markets remain unchanged, that is, partial-equilibrium analysis. A partial equilibrium is a type of Economic equilibrium, where the clearance on the market of some specific goods is obtained independently from prices and quantities demanded General-equilibrium theory allows for changes in different markets and aggregates across all markets, including their movements and interactions toward equilibrium. General equilibrium theory is a branch of theoretical Microeconomics. [64][65]
Macroeconomics
Macroeconomics examines the economy as a whole to explain broad aggregates and their interactions "top down," that is, using a simplified form of general-equilibrium theory. Macroeconomics is a branch of Economics that deals with the performance structure and behavior of a national or regional Economy as a whole General equilibrium theory is a branch of theoretical Microeconomics. [66] Such aggregates include national income and output, the unemployment rate, and price inflation and subaggregates like total consumption and investment spending and their components. Unemployment occurs when a person is available to work and currently seeking work but the person is without work. In economics inflation or price inflation is a rise in the general level of prices of goods and services over a period of time It also studies effects of monetary policy and fiscal policy. Monetary policy is the process by which the Government, Central bank, or monetary authority of a country controls (i the Supply of Money, Fiscal policy, taking the scope of Budgetary policy, refers to government policy that attempts to influence the direction of the economy through changes in government taxes Since at least the 1960s, macroeconomics has been characterized by further integration as to micro-based modeling of sectors, including rationality of players, efficient use of market information, and imperfect competition. In economics the term microfoundations refers to the microeconomic analysis of the behavior of individual agents such as households or firms that underpins a Rational expectations is an assumption used in many contemporary macroeconomic models, and also in other areas of contemporary Economics and Game theory In economic theory imperfect competition is the competitive situation in any market where the conditions necessary for Perfect competition are not satisfied [67] This has addressed a long-standing concern about inconsistent developments of the same subject. [68] Macroeconomic analysis also considers factors affecting the long-term level and growth of national income. Economic growth is the increase in the amount of the goods and services produced by an economy over time Such factors include capital accumulation, technological change and labor force growth. Technological change (TC is a term that is used to describe the overall process of Invention, Innovation and Diffusion of Technology or In Economics the people in the labor force are the suppliers of labor [69][70]
Mathematical and quantitative methods
Economics as an academic subject often uses geometric methods, in addition to literary methods. Other general mathematical and quantitative methods are also often used for rigorous analysis of the economy or areas within economics. Such methods include the following.
Mathematical economics
Mathematical economics refers to application of mathematical methods to represent economic theory or analyze problems posed in economics. Mathematical economics refers to the application of Mathematical methods to represent economic theories and analyze problems posed in Economics. A mathematical problem is a problem that is amenable to being analyzed and possibly solved with the methods of Mathematics. It uses such methods as calculus and matrix algebra. Calculus ( Latin, calculus, a small stone used for counting is a branch of Mathematics that includes the study of limits, Derivatives Expositors cite its advantage in allowing formulation and derivation of key relationships in an economic model with clarity, generality, rigor, and simplicity. [71] For example, Paul Samuelson's book Foundations of Economic Analysis (1947) identifies a common mathematical structure across multiple fields in the subject. Paul Anthony Samuelson (born May 15, 1915) is an American neoclassical Economist known for his contributions to many fields of Foundations of Economic Analysis is a book by Paul A Samuelson published in 1947 (Enlarged ed
Econometrics
Econometrics applies mathematical and statistical methods to analyze data related to economic models. Econometrics is concerned with the tasks of developing and applying Quantitative or Statistical methods to the study and elucidation of economic principles Statistics is a mathematical science pertaining to the collection analysis interpretation or explanation and presentation of Data. Economic data are usually numerical Time-series, ie sets of data (covering periods of time for part or all of a single economy or the international For example, a theory may hypothesize that a person with more education will on average earn more income than a person with less education holding everything else equal. Econometric estimates can estimate the magnitude and statistical significance of the relation. In Statistics, a result is called statistically significant if it is unlikely to have occurred by Chance. Econometrics can be used to draw quantitative generalizations. These include testing or refining a theory, describing the relation of past variables, and forecasting future variables. [72]
National accounting
National accounting is a method for summarizing aggregate economic activity of a nation. National accounts or national account systems (NAS provide a complete and consistent conceptual framework for measuring the economic activity of a nation (or other geographic The national accounts are double-entry accounting systems that provide detailed underlying measures of such information. In Accountancy, the double-entry These include the national income and product accounts (NIPA), which provide estimates for the money value of output and income per year or quarter. National Income and Product Accounts (NIPA use Double-entry accounting to report the monetary value and sources of output produced in a country and the distribution of incomes NIPA allows for tracking the performance of an economy and its components through business cycles or over longer periods. The term business cycle or economic cycle refers to the fluctuations of economic activity during its long term growth trend Price data may permit distinguishing nominal from real amounts, that is, correcting money totals for price changes over time. The distinction between real versus nominal value occurs in many fields [73][74] The national accounts also include measurement of the capital stock, wealth of a nation, and international capital flows. In Economics, capital or capital Goods or real capital refers to items of extensive value In Economics and Business, Wealth of a person or nation is the value of Assets owned net of liabilities owed (to foreigners in the International economics is a branch of Economics with three main subdisciplines International trade, Monetary theory and International finance [75]
Selected fields
Agricultural economics
Agricultural economics is one the oldest and most established fields of economics. Agricultural economics originally applied the principles of Economics to the production of Crops and Livestock — a discipline known as Agronomics It is the study of the economic forces that affect the agricultural sector and the agricultural sector's impact on the rest of the economy. It is an area of economics that, thanks to the necessity of applying microeconomic theories to complex real world situations, has given rise to many important advances of more general applicability; the role of risk and uncertainty, the behaviour of households and links between property rights and incentives. More recently policy areas such as international commodity trade and the environment have been stressed. [76]
Development and growth economics
Growth economics studies factors that explain economic growth – the increase in output per capita of a country over a long period of time. Economic growth is the increase in the amount of the goods and services produced by an economy over time Per capita is a Latin phrase meaning for each head with Per meaning 'through' or 'by' The same factors are used to explain differences in the level of output per capita between countries. Much-studied factors include the rate of investment, population growth, and technological change. Investment or investing is a term with several closely-related meanings in Business management, Finance and Economics, related to saving Population growth is the change in Population over time and can be quantified as the change in the number of individuals in a population using "per unit time" for Technological change (TC is a term that is used to describe the overall process of Invention, Innovation and Diffusion of Technology or These are represented in theoretical and empirical forms (as in the neoclassical growth model) and in growth accounting. A central concept in Science and the Scientific method is that all Evidence must be empirical, or empirically based that is dependent on evidence The Exogenous growth model, also known as the Neo-classical growth model or Solow growth model is a term used to sum up the contributions of various authors to a Growth accounting is a set of theories used in Economics to explain and model short run Economic growth. [77][78] The distinct field of development economics examines economic aspects of the development process in relatively low-income countries focussing on structural change, poverty, and economic growth. Developing countries are countries that haven't reached Western-style standards of democratic government free market economy industrialization social programs and human rights guaranties Structural change of an Economy refers to a long-term widespread change of the fundamental structure rather than microscale or short-term output and employment Poverty (also called penury) is deprivation of common necessities that determine the quality of life including food clothing shelter and safe Drinking water, and Economic growth is the increase in the amount of the goods and services produced by an economy over time Approaches in development economics frequently incorporate social and political factors. [79][80]
Economic systems
Economic systems is the branch of economics that studies the methods and institutions by which societies determine the ownership, direction, and allocaton of economic resources. An economic system is a System that involves the production, distribution and consumption of goods and services between Articles in economics journals are usually classified according to the system used by the Journal of Economic Literature (JEL Institutions are structures and mechanisms of Social order and Cooperation governing the Behavior of a Set of Individuals An economic system of a society is the unit of analysis. Among contemporary systems at different ends of the organizational spectrum are socialist systems and capitalist systems, in which most production occurs in respectively state-run and private enterprises. A planned economy or directed economy is an Economic system in which the Government or Workers' councils manages the Economy. Capitalism is the Economic system in which the Means of production are owned by private Persons and operated for Profit and where In between are mixed economies. A mixed economy is an Economic system that incorporates aspects of more than one economic system A common element is the interaction of economic and political influences, broadly described as political economy. Political economy originally was the term for studying production buying and selling and their relations with law custom and government Comparative economic systems studies the relative performance and behavior of different economies or systems. Comparative economic systems is the subfield of economics dealing with the comparative study of different systems of economic organization such as Capitalism, Socialism [81][82]
Environmental economics
Environmental economics is concerned with issues related to degradation, enhancement, or preservation of the environment. Environmental economics is a subfield of Economics concerned with environmental issues See also Natural environment The '''biophysical''' environment is the symbiosis between the physical environment and the Biological In particular, public bads from production or consumption, such as air pollution, can lead to market failure. A public bad, in Green economics, is a good that produces socially undesirable results Market failure is a concept within economic theory wherein the allocation of goods and services by a Free market is not efficient. The subject considers how public policy can be used to correct such failures. Policy options include regulations that reflect cost-benefit analysis or market solutions that change incentives, such as emission fees or redefinition of property rights. Cost-benefit analysis is a term that refers both to a formal discipline used to help appraise or assess the case for a Project or proposal which itself is Emissions trading (or emission trading) is an administrative approach used to control Pollution by providing economic Incentives for [83][84] Environmental Economics should not be conflated with new schools of economic thought sometimes referred to as ecological economics. Ecological economics is a Transdisciplinary field of academic research within Economics that aims to address the interdependence between human economies and natural
Financial economics
Financial economics, often simply referred to as finance, is concerned with the allocation of financial resources in an uncertain (or risky) environment. Financial economics is the branch of Economics concerned with "the allocation and deployment of economic resources both spatially and across time in an uncertain environment" The field of finance refers to the concepts of Time, Money and Risk and how they are interrelated Risk is a Concept that denotes the precise probability of specific eventualities Thus, its focus is on the operation of financial markets, the pricing of financial instruments, and the financial structure of companies. In Economics, a financial market is a mechanism that allows people to easily buy and sell ( Trade) financial Securities (such as stocks and bonds Financial instruments are cash evidence of an ownership interest in an entity or a contractual right to receive or deliver cash or another financial instrument [85]
Game theory
Game theory is a branch of applied mathematics that studies strategic interactions between agents. Game theory is a branch of Applied mathematics that is used in the Social sciences (most notably Economics) Biology, Engineering, Applied mathematics is a branch of Mathematics that concerns itself with the mathematical techniques typically used in the application of mathematical knowledge to other domains In strategic games, agents choose strategies that will maximize their payoff, given the strategies the other agents choose. A strategy game is a Game (eg computer, video or Board game) in which the players' decision-making skills have a high significance In Economics, an agent is an actor in a model that (generally solves an optimization problem It provides a formal modeling approach to social situations in which decision makers interact with other agents. Game theory generalizes maximization approaches developed to analyze markets such as the supply and demand model. Supply and demand is an Economic model describing effects on price and quantity in a Market. The field dates from the 1944 classic Theory of Games and Economic Behavior by John von Neumann and Oskar Morgenstern. Theory of Games and Economic Behavior, published in 1944 by Princeton University Press, is a book by Mathematician John von Neumann Oskar Morgenstern ( January 24, 1902 – July 26, 1977) was a German born Austrian economist. It has found significant applications in many areas outside economics as usually construed, including formulation of nuclear strategies, ethics, political science, and evolutionary theory. Nuclear strategy involves the development of doctrines and strategies for the production and use of Nuclear weapons As a sub-branch of Military Game theory is a branch of Applied mathematics that is used in the Social sciences (most notably Economics) Biology, Engineering, Game theory is a branch of Applied mathematics that is used in the Social sciences (most notably Economics) Biology, Engineering, [86]
Industrial organization
Industrial organization studies the strategic behavior of firms, the structure of markets and their interactions. Industrial Organization is a field of Economics that studies the strategic behavior of firms the structure of Markets and their interactions The common market structures studied include perfect competition, monopolistic competition, various forms of oligopoly, and monopoly. In Neoclassical economics and Microeconomics, perfect competition describes a market in which no buyer or seller has Market power. Monopolistic competition is a common Market form. Many markets can be considered monopolistically competitive often including the markets for Restaurants, Cereal An oligopoly is a Market form in which a Market or Industry is dominated by a small number of sellers (oligopolists In Economics, a monopoly (from Greek monos, alone or single + polein, to sell exists when a specific individual or enterprise has sufficient [87]
Information economics
Information economics examines how information (or a lack of it) affects economic decision-making. Information economics or the economics of information is a branch of microeconomic theory that studies how information affects an Economy and economic decisions An important focus is the concept of information asymmetry, where one party has more or better information than the other. In Economics and Contract theory, information asymmetry deals with the study of decisions in transactions where one party has more or better Information The existence of information asymmetry gives rise to problems such as moral hazard, and adverse selection, studied in contract theory. Moral hazard is the prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk Adverse selection, anti-selection, or negative selection is a term used in Economics, Insurance, Statistics, and Risk management In Economics, contract theory studies how economic actors can and do construct contractual arrangements generally in the presence of Asymmetric information. The economics of information has relevance in many fields, including finance, insurance, contract law, and decision-making under risk and uncertainty. The field of finance refers to the concepts of Time, Money and Risk and how they are interrelated Insurance, in Law and Economics, is a form of Risk management primarily used to hedge against the Risk of a contingent loss A contract is an exchange of promises between two or more parties to do or refrain from doing an act which is enforceable in a court of law [88]
International economics
International trade studies determinants of goods-and-services flows across international boundaries. International trade is exchange of Capital, Goods, and Services across International borders or Territories. International finance is the branch of economics that studies the dynamics of Exchange rates, Foreign investment, and how these affect International trade It also concerns the size and distribution of gains from trade. Gains from trade in Economics refers to net benefits to agents from voluntary trading with each other Policy applications include estimating the effects of changing tariff rates and trade quotas. For other uses of this word see Tariff (disambiguation. A tariff is a tax imposed on goods when they are moved across a political boundary International finance is a macroeconomic field which examines the flow of capital across international borders, and the effects of these movements on exchange rates. International finance is the branch of economics that studies the dynamics of Exchange rates, Foreign investment, and how these affect International trade In Economics, capital or capital Goods or real capital refers to items of extensive value In Finance, the exchange rates (also known as the foreign-exchange rate, forex rate or FX rate) between two currencies specifies how Increased trade in goods, services and capital between countries is a major effect of contemporary globalization. Globalization (or globalisation) in its literal sense is the process of transformation of local or regional phenomena into global ones [89] [90] [91]
Labour economics
Labour economics seeks to understand the functioning of the market and dynamics for labour. Labour economics seeks to understand the functioning of the Market and dynamics for labour. Sao Paulo Stock Exchangejpg|thumb| Virtual market arena where buyer and seller are not present and trade via intemediates and electronical information Labour markets function through the interaction of workers and employers. Labour economics seeks to understand the functioning of the Market and dynamics for labour. Labour economics looks at the suppliers of labour services (workers), the demanders of labour services (employers), and attempts to understand the resulting patterns of wages and other labour income and of employment and unemployment, Practical uses include assisting the formulation of full employment of policies. In Macroeconomics, full employment is when all people looking for employment can find a job [92]
Law and economics
Law and economics, or economic analysis of law, is an approach to legal theory that applies methods of economics to law. Law and Economics, or economic analysis of law is an approach to Legal theory that applies methods of Economics to law It includes the use of economic concepts to explain the effects of legal rules, to assess which legal rules are economically efficient, and to predict what the legal rules will be. Economic efficiency is used to refer to a number of related concepts [93][94] A seminal article by Ronald Coase published in 1961 suggested that well-defined property rights could overcome the problems of externalities. Ronald Harry Coase (born December 29, 1910) is a British Economist and the Clifton R In Economics, an externality is an impact on any party not directly involved in an economic decision [95]
Managerial economics
Managerial economics applies microeconomic analysis to specific decisions in business firms or other management units. Managerial economics (also called business economics) is a branch of Economics that applies Microeconomic analysis to specific business decisions Microeconomics is a branch of Economics that studies how individuals households and firms and some states make decisions to allocate limited resources typically in markets It draws heavily from quantitative methods such as operations research and programming and from statistical methods such as regression analysis in the absence of certainty and perfect knowledge. Operations Research (OR in North America South Africa and Australia and Operational Research in Europe is an interdisciplinary branch of applied Mathematics and In statistics regression analysis is a collective name for techniques for the modeling and analysis of numerical data consisting of values of a Dependent variable (response A unifying theme is the attempt to optimize business decisions, including unit-cost minimization and profit maximization, given the firm's objectives and constraints imposed by technology and market conditions. In Mathematics, the term optimization, or mathematical programming, refers to the study of problems in which one seeks to minimize or maximize a real function [96][97]
Public finance
Public finance is the field of economics that deals with budgeting the revenues and expenditures of a public sector entity, usually government. Public finance is a field of economics concerned with paying for collective or governmental activities and with the administration and design of those activities The public sector is the part of economic and administrative life that deals with the delivery of goods and services by and for the Government, whether national Regional The subject addresses such matters as tax incidence (who really pays a particular tax), cost-benefit analysis of government programs, effects on economic efficiency and income distribution of different kinds of spending and taxes, and fiscal politics. In Economics, tax incidence is the analysis of the effect of a particular Tax on the distribution of economic welfare. Economic efficiency is used to refer to a number of related concepts Income inequality metrics or income distribution metrics are techniques used by economists to measure the distribution of Income and Economic inequality The latter, an aspect of public choice theory, models public-sector behavior analogously to microeconomics, involving interactions of self-interested voters, politicians, and bureaucrats. Public choice in economic theory is the use of modern Economic tools to study problems that are traditionally in the province of Political science. [98]
Welfare economics
Welfare economics is a branch of economics that uses microeconomic techniques to simultaneously determine the allocative efficiency within an economy and the income distribution associated with it. Welfare economics is a branch of Economics that uses microeconomic techniques to simultaneously determine Allocative efficiency within an economy and the Microeconomics is a branch of Economics that studies how individuals households and firms and some states make decisions to allocate limited resources typically in markets Allocative efficiency is a situation in which the limited resources of a firm are allocated in accordance with the wishes of Consumers An allocatively efficient economy Distribution in Economics refers to the way total output or income is distributed among individuals or among the Factors of production ( labor, land It attempts to measure social welfare by examining the economic activities of the individuals that comprise society. "Social welfare" redirects here For other uses see Welfare A social welfare provision refers to any program which seeks to provide [99]
History and schools of economics
Early economic thought
Ancient economic thought dates from earlier Mesopotamian, Greek, Roman, Indian, Chinese, Persian and Arab civilizations. The history of economic thought deals with different thinkers and theories in the field of Political economy and Economics from the ancient world to the present In the History of economic thought, ancient economic thought refers to the ideas from people before the Middle Ages Mesopotamia (from the Greek meaning "land between the rivers" is an area geographically located between the Tigris and Euphrates rivers largely corresponding The term ancient Greece refers to the period of Greek history lasting from the Greek Dark Ages ca Ancient Rome was a Civilization that grew out of a small agricultural community founded on the Italian Peninsula as early as the 10th century BC This article is about the history of South Asia prior to the Partition of British India in 1947 China ( Wade-Giles ( Mandarin) Chung¹kuo² is a cultural region, an ancient Civilization, and depending on perspective a National The Persian Empire was a series of Iranian empires that ruled over the Iranian plateau, the original Persian homeland and beyond in Western Asia Notable writers include Aristotle, Chanakya, Qin Shi Huang, Thomas Aquinas and Ibn Khaldun through to the 14th century. Aristotle (Greek Aristotélēs) (384 BC – 322 BC was a Greek philosopher a student of Plato and teacher of Alexander the Great. Chanakya Sanskrit: चाणक्य Cāṇakya) (c 350-283 BC was an adviser and a Prime minister to the first Maurya Emperor Qin Shi Huang ( (259 BC – September 10 210 BC personal name Yíng Zhèng, was king of the Chinese State of Qin from 247 BCE to 221 BCE (during the Ibn Khaldūn or Ibn Khaldoun (full name أبو زيد عبد الرحمن بن محمد بن خلدون,, ( May 27, 1332 AD/732 AH &ndash March 19 Joseph Schumpeter initially considered the late scholastics of the 14th to 17th centuries as "coming nearer than any other group to being the 'founders' of scientific economics" as to monetary, interest, and value theory within a natural-law perspective. Joseph Alois Schumpeter ( February 8, 1883 &ndash January 8, 1950) was an Economist and Political scientist born in Scholasticism was the dominant form of theology and philosophy in the Latin West in the Middle Ages, particularly in the 12th 13th and 14th centuries Natural law or the law of nature ( Latin: lex naturalis) is a theory that posits the existence of a law whose content is set by Nature and that [100] After discovering Ibn Khaldun's Muqaddimah, however, Schumpeter later viewed Ibn Khaldun as being the closest forerunner of modern economics,[101] as many of his economic theories were not known in Europe until relatively modern times. The Muqaddimah, or the Muqaddimah of Ibn Khaldun ( Arabic: ar مقدّمة ابن خلدون Amazigh: Tazwarit n Ibn Xldun [102]
Two other groups, later called 'mercantilists' and 'physiocrats', more directly influenced the subsequent development of the subject. Both groups were associated with the rise of economic nationalism and modern capitalism in Europe. Economic nationalism is a term used to describe policies which are guided by the idea of protecting domestic consumption labor and capital formation even if this requires the imposition The history of Capitalism dates back to early forms of Merchant capitalism practiced in the Middle East and Western Europe during the Mercantilism was an economic doctrine that flourished from the 16th to 18th century in a prolific pamphlet literature, whether of merchants or statesmen. Mercantilism is the idea that a colony should export more goods than it imports and that a colony should sell at higher prices and buy at lower prices It held that a nation's wealth depended on its accumulation of gold and silver. Nations without access to mines could obtain gold and silver from trade only by selling goods abroad and restricting imports other than of gold and silver. The doctrine called for importing cheap raw materials to be used in manufacturing goods, which could be exported, and for state regulation to impose protective tariffs on foreign manufactured goods and prohibit manufacturing in the colonies. [103][104]
Physiocrats, a group of 18th century French thinkers and writers, developed the idea of the economy as a circular flow of income and output. The physiocrats were a group of Economists who believed that the wealth of nations was derived solely from the value of land Agriculture or land development In Economics, the term circular flow of income or circular flow refers to a simple economic model which describes the reciprocal circulation of income between producers Adam Smith described their system "with all its imperfections" as "perhaps the purest approximation to the truth that has yet been published" on the subject. Adam Smith ( baptised 16 June 1723 – 17 July 1790) was a Scottish moral philosopher and a pioneer of Political economy. Physiocrats believed that only agricultural production generated a clear surplus over cost, so that agriculture was the basis of all wealth. Thus, they opposed the mercantilist policy of promoting manufacturing and trade at the expense of agriculture, including import tariffs. Physiocrats advocated replacing administratively costly tax collections with a single tax on income of land owners. Variations on such a land tax were taken up by subsequent economists (including Henry George a century later) as a relatively non-distortionary source of tax revenue. Land value taxation (LVT (or site value taxation) is an Ad valorem tax where only the value of land itself is taxed Henry George ( September 2, 1839 &ndash October 29, 1897) was an American Political economist and the most influential proponent of In Economics, the excess burden of Taxation, also known as the distortionary cost or deadweight loss of taxation is the economic loss that society In reaction against copious mercantilist trade regulations, the physiocrats advocated a policy of laissez-faire, which called for minimal government intervention in the economy. Laissez-faire ( pronunciation: French,; English,) is a French phrase literally meaning Let do (“allow to do” [105][106]
Classical economics
Publication of Adam Smith's The Wealth of Nations in 1776, has been described as "the effective birth of economics as a separate discipline. Classical economics is widely regarded as the first modern school of economic thought. Adam Smith ( baptised 16 June 1723 – 17 July 1790) was a Scottish moral philosopher and a pioneer of Political economy. An Inquiry into the Nature and Causes of the Wealth of Nations is the Magnum opus of the Scottish economist Adam Smith. "[107] The book identified land, labor, and capital as the three factors of production and the major contributors to a nation's wealth.
In Smith's view, the ideal economy is a self-regulating market system that automatically satisfies the economic needs of the populace. He described the market mechanism as an "invisible hand" that leads all individuals, in pursuit of their own self-interests, to produce the greatest benefit for society as a whole. Smith incorporated some of the Physiocrats' ideas, including laissez-faire, into his own economic theories, but rejected the idea that only agriculture was productive.
In his famous invisible-hand analogy, Smith argued for the seemingly paradoxical notion that competitive markets tended to advance broader social interests, although driven by narrower self-interest. The invisible hand is a Metaphor coined by the Economist Adam Smith. A paradox is a true statement or group of statements that leads to a Contradiction or a situation which defies intuition; or inversely The general approach that Smith helped initiate was called political economy and later classical economics. Political economy originally was the term for studying production buying and selling and their relations with law custom and government Classical economics is widely regarded as the first modern school of economic thought. It included such notables as Thomas Malthus, David Ricardo, and John Stuart Mill writing from about 1770 to 1870. Thomas Robert Malthus FRS (13 February 1766 – 23 December 1834 was an English political economist and demographer who expressed views David Ricardo (18 April 1772 &ndash 11 September 1823 was an English political economist, often credited with systematizing economics and was one of the most influential John Stuart Mill (20 May 1806 &ndash 8 May 1873 British Philosopher, political economist, civil servant and Member of Parliament, was an influential [108]
While Adam Smith emphasized the production of income, David Ricardo focused on the distribution of income among landowners, workers, and capitalists. Ricardo saw an inherent conflict between landowners on the one hand and labor and capital on the other. He posited that the growth of population and capital, pressing against a fixed supply of land, pushes up rents and holds down wages and profits.
Thomas Robert Malthus used the idea of diminishing returns to explain low living standards. Population, he argued, tended to increase geometrically, outstripping the production of food, which increased arithmetically. The force of a rapidly growing population against a limited amount of land meant diminishing returns to labor. The result, he claimed, was chronically low wages, which prevented the standard of living for most of the population from rising above the subsistence level.
Malthus also questioned the automatic tendency of a market economy to produce full employment. A market economy is a realized Social system based on the Division of labour in which the prices of Goods and Services are determined in a He blamed unemployment upon the economy's tendency to limit its spending by saving too much, a theme that lay forgotten until John Maynard Keynes revived it in the 1930s.
Coming at the end of the Classical tradition, John Stuart Mill parted company with the earlier classical economists on the inevitability of the distribution of income produced by the market system. Mill pointed to a distinct difference between the market's two roles: allocation of resources and distribution of income. The market might be efficient in allocating resources but not in distributing income, he wrote, making it necessary for society to intervene.
Value theory was important in classical theory. Smith wrote that the "real price of every thing . . . is the toil and trouble of acquiring it" as influenced by its scarcity. Smith maintained that, with rent and profit, other costs besides wages also enter the price of a commodity. [109] Other classical economists presented variations on Smith, termed the 'labour theory of value'. The labor theories of value (LTV are theories in Economics according to which the values of Commodities are related to the labor needed to Classical economics focused on the tendency of markets to move to long-run equilibrium.
Marxist economics
Marxist (later, Marxian) economics descends from classical economics. It derives from the work of Karl Marx. The first volume of Marx's major work, Capital, was published in German in 1867. In it, Marx focused on the labour theory of value and what he considered to be the exploitation of labour by capital. The labor theories of value (LTV are theories in Economics according to which the values of Commodities are related to the labor needed to Thus, the labour theory of value, rather than simply a theory of price, was a method for measuring the exploitation of labour in a capitalist society,[110][111] although concealed by appearances of "vulgar" political economy. [112][113]
Neoclassical economics
A body of theory later termed 'neoclassical economics' or 'marginalist economics' formed from about 1870 to 1910. Neoclassical economics is a term variously used for approaches to Economics focusing on the determination of prices outputs and income distributions in markets Marginalism is the use of Marginal concepts within Economics. The term 'economics' was popularized by neoclassical economists such as Alfred Marshall as a substitute for the earlier term 'political economy'. Alfred Marshall (born 26 July 1842 in Bermondsey, London, England, died 13 July 1924 in Cambridge Political economy originally was the term for studying production buying and selling and their relations with law custom and government Neoclassical economics systematized supply and demand as joint determinants of price and quantity in market equilibrium, affecting both the allocation of output and the distribution of income. Supply and demand is an Economic model describing effects on price and quantity in a Market. It dispensed with the labour theory of value inherited from classical economics in favor of a marginal utility theory of value on the demand side and a more general theory of costs on the supply side. The labor theories of value (LTV are theories in Economics according to which the values of Commodities are related to the labor needed to In Economics, the marginal utility of a good or of a service is the Utility of the specific use to which an agent would put a given increase [114]
In microeconomics, neoclassical economics represents incentives and costs as playing a pervasive role in shaping decision making. Microeconomics is a branch of Economics that studies how individuals households and firms and some states make decisions to allocate limited resources typically in markets Decision making can be regarded as an outcome of mental processes ( cognitive process) leading to the selection of a course of action among several alternatives An immediate example of this is the consumer theory of individual demand, which isolates how prices (as costs) and income affect quantity demanded. Consumer theory is a theory of Microeconomics that relates Preferences to consumer demand curves. In macroeconomics it is reflected in an early and lasting neoclassical synthesis with Keynesian macroeconomics. Macroeconomics is a branch of Economics that deals with the performance structure and behavior of a national or regional Economy as a whole Neoclassical synthesis refers to a postwar academic movement in Economics which attempted to absorb the Macroeconomic thought of John Maynard Keynes into [115][116]
Neoclassical economics is occasionally referred as orthodox economics whether by its critics or sympathizers. Modern mainstream economics builds on neoclassical economics but with many refinements that either supplement or generalize earlier analysis, such as econometrics, game theory, analysis of market failure and imperfect competition, and the neoclassical model of economic growth for analyzing long-run variables affecting national income. Mainstream economics is a loose term used to refer to the non- heterodox economics taught in prominent universities Econometrics is concerned with the tasks of developing and applying Quantitative or Statistical methods to the study and elucidation of economic principles Game theory is a branch of Applied mathematics that is used in the Social sciences (most notably Economics) Biology, Engineering, Market failure is a concept within economic theory wherein the allocation of goods and services by a Free market is not efficient. In economic theory imperfect competition is the competitive situation in any market where the conditions necessary for Perfect competition are not satisfied Neoclassical economics is a term variously used for approaches to Economics focusing on the determination of prices outputs and income distributions in markets Economic growth is the increase in the amount of the goods and services produced by an economy over time
Keynesian economics
Keynesian economics derives from John Maynard Keynes, in particular his book The General Theory of Employment, Interest and Money (1936), which ushered in contemporary macroeconomics as a distinct field. John Maynard Keynes 1st Baron Keynes CB (ˈkeɪnz "cains" (5 June 1883 &ndash 21 April 1946 was a British Economist whose ideas The General Theory of Employment Interest and Money was written by the English economist John Maynard Keynes. Macroeconomics is a branch of Economics that deals with the performance structure and behavior of a national or regional Economy as a whole [117][118] The book focused on determinants of national income in the short run when prices are relatively inflexible. Keynes attempted to explain in broad theoretical detail why high labour-market unemployment might not be self-correcting due to low "effective demand" and why even price flexibility and monetary policy might be unavailing. Effective demand (in Macroeconomics usually regarded as synonymous with Aggregate demand) is an economic principle that suggests consumer needs and desires must be Such terms as "revolutionary" have been applied to the book in its impact on economic analysis. [119][120][121]
Keynesian economics has two successors. Post-Keynesian economics also concentrates on macroeconomic rigidities and adjustment processes. Post Keynesian economics is a school of thought with its origins in The General Theory of John Maynard Keynes, although its subsequent development was influenced Research on micro foundations for their models is represented as based on real-life practices rather than simple optimizing models. It is generally associated with the University of Cambridge and the work of Joan Robinson. The University of Cambridge (often Cambridge University) located in Cambridge, England, is the second-oldest university in the Joan Violet Robinson ( October 31, 1903 in Surrey - August 5, 1983 in Cambridge) was a post-Keynesian economist [122] New-Keynesian economics is also associated with developments in the Keynesian fashion. New Keynesian economics is a school of contemporary Macroeconomics that strives to provide microeconomic foundations for Keynesian economics. Within this group researchers tend to share with other economists the emphasis on models employing micro foundations and optimizing behavior but with a narrower focus on standard Keynesian themes such as price and wage rigidity. These are usually made to be endogenous features of the models, rather than simply assumed as in older Keynesian-style ones.
Other schools and approaches
Other well-known schools or trends of thought referring to a particular style of economics practiced at and disseminated from well-defined groups of academicians that have become known worldwide, include the Austrian School, Chicago School, the Freiburg School, the School of Lausanne and the Stockholm school. The Austrian School, also known as the “ Vienna School ” or the “ Psychological School ” is a heterodox school of economics that advocates The Freiburg School is a school of economic thought founded in the 1930s at the University of Freiburg. The School of Lausanne is a neoclassical school of thought in Economics founded at the University of Lausanne by two of its Professors Léon Walras and The Stockholm school, or Stockholmsskolan, is a school of economic thought.
Within macroeconomics there is, in general order of their appearance in the literature; classical economics, Keynesian economics, the neoclassical synthesis, post-Keynesian economics, monetarism, new classical economics, and supply-side economics. Classical economics is widely regarded as the first modern school of economic thought. In Economics Keynesian economics (ˈkeɪnziən also Keynesianism and Keynesian Theory) is based on the ideas of twentieth-century British economist Post Keynesian economics is a school of thought with its origins in The General Theory of John Maynard Keynes, although its subsequent development was influenced Monetarism is a school of economic thought concerning the determination of national income and monetary Economics. New classical macroeconomics emerged as a school in Macroeconomics during the 1970s Supply-side economics is an arguably heterodox school of Macroeconomic thought that argues that economic growth can be most effectively created using incentives for New alternative developments include ecological economics, evolutionary economics, dependency theory, structuralist economics, Abstinence theory and world systems theory. Ecological economics is a Transdisciplinary field of academic research within Economics that aims to address the interdependence between human economies and natural Evolutionary economics is a relatively new economic and diverse school of thought that is inspired by evolutionary Biology. Dependency theory is a body of Social science theories both from developed and Developing nations which are predicated on the notion that resources Structuralist economics originated with the work of the Economic Commission for Latin America (ECLA or CEPAL and is primarily associated with its director Raul Prebisch Abstinence Theory of Interest asserts that the Money used for Lending purposes is the money not used for Consumption - which means earning Interest World system approach is a Post-Marxist view of world affairs one of several historical and current applications of Marxism to International relations.
Historic definitions of economics
This section extends the discussion of the definitions of Economics at the beginning of the article.
Influential early discussions of political economy were related to wealth broadly defined, as in the work of David Hume and Adam Smith. In Economics and Business, Wealth of a person or nation is the value of Assets owned net of liabilities owed (to foreigners in the David Hume (26 April 1711 25 August 1776 Scottish Philosopher, Economist, and Historian is an important figure in Western philosophy Hume argued that additional gold without increased production only served to raise prices. [123] Smith also described real wealth, not in earlier terms of gold and silver, but the "annual produce of the labour and land of the society. "[124]
John Stuart Mill defined economics as "the practical science of production and distribution of wealth"; this definition was adopted by the Concise Oxford English Dictionary even though it does not include the vital role of consumption. John Stuart Mill (20 May 1806 &ndash 8 May 1873 British Philosopher, political economist, civil servant and Member of Parliament, was an influential Concise Oxford English Dictionary (until 2002 officially entitled The Concise Oxford Dictionary, and widely known by the abbreviation COD For Mill, wealth is defined as the stock of useful things. [125]
Definitions of the subject in terms of wealth emphasize production and consumption. This emphasis was charged by critics as too narrow a focus in placing wealth to the forefront and man in the background. For example, John Ruskin referred disparagingly to political economy as "the science of getting rich"[126] and a "bastard science. John Ruskin (8 February 1819 &ndash 20 January 1900 is best known for his work as an Art critic, sage writer, and Social critic, but is remembered "[127]
Broader later definitions evolved to include the study of man, human activity, and human welfare, not wealth as such. Alfred Marshall in his 1890 book Principles of Economics wrote, "Political Economy or Economics is a study of mankind in the ordinary business of Life; it examines that part of the individual and social action which is most closely connected with the attainment and with the use of material requisites of well-being. Alfred Marshall (born 26 July 1842 in Bermondsey, London, England, died 13 July 1924 in Cambridge "[128]
Criticisms of welfare and scarcity definitions of economics
The definition of economics in terms of material being is criticized as too narrowly materialistic. Welfare could not be quantitatively measured, because the marginal significance of money differs from rich to the poor (that is, $100 is relatively more important to the well-being of a poor person than to that of a wealthy person). Marginal value is a term widely used in Economics, to refer to the change in economic value associated with a unit change in output consumption or some other economic choice Moreover, the activities of production and distribution of goods such as alcohol and tobacco may not be conducive to human welfare, but these scarce goods do satisfy innate human wants and desires.
Marxist economics still focuses on a welfare definition. Marxism is the political philosophy and practice derived from the work of Karl Marx and Friedrich Engels. In addition, several critiques of mainstream economics begin from the argument that current economic practice does not adequately measure welfare, but only monetized activity, which is an inadequate approximation of welfare.
The focus on scarcity continues to dominate neoclassical economics, which, in turn, predominates in most academic economics departments. Neoclassical economics is a term variously used for approaches to Economics focusing on the determination of prices outputs and income distributions in markets It has been criticized in recent years from a variety of quarters, including institutional economics and evolutionary economics and surplus economics. Institutional economics, known by some as Institutionalist political economy, focuses on understanding the role of human-made institutions in shaping economic behaviour Evolutionary economics is a relatively new economic and diverse school of thought that is inspired by evolutionary Biology. Surplus economics is the study of Economics based upon the concept that economies operate on the basis of the production of a surplus over basic needs
Criticism
Economics and politics
Some economists, like John Stuart Mill or Leon Walras, have maintained that the production of wealth should not be tied to its distribution. John Stuart Mill (20 May 1806 &ndash 8 May 1873 British Philosopher, political economist, civil servant and Member of Parliament, was an influential Marie-Esprit-Léon Walras ( December 16, 1834 in Évreux, France - January 5, 1910 in Clarens near Montreux The former is in the field of "applied economics" while the latter belongs to "social economics" and is largely a matter of power and politics. [129]
Economics per se, as a social science, do not stand on the political acts of any government or other decision-making organization, however, many policymakers or individuals holding highly ranked positions that can influence other people's lives are known for arbitrarily use a plethora of economic theory concepts and rhetoric as vehicles to legitimize agendas and value systems, and do not limit their remarks to matters relevant to their responsibilities. A politician (from Greek " Polis " is an individual who is involved in influencing public decision making through the influence of Politics or a person Rhetoric has had many definitions no simple definition can do it justice A value system is a set of Consistent Ethic values (more specifically the Personal and cultural values) and measures used for the purpose of Ethical [130] The close relation of economic theory and practice with politics[131] is a focus of contention that may shade or distort the most unpretentious original tenets of economics, and is often confused with specific social agendas and value systems. Politics Politics is the process by which groups of people make decisions [132]
Issues like central bank independence, central bank policies and rhetoric in central bank governors discourse or the premises of macroeconomic policies[133] (monetary and fiscal policy) of the States, are focus of contention and criticism. A central bank, reserve bank, or monetary authority is the entity responsible for the Monetary policy of a country or of a group of member states Macroeconomics is a branch of Economics that deals with the performance structure and behavior of a national or regional Economy as a whole Monetary policy is the process by which the Government, Central bank, or monetary authority of a country controls (i the Supply of Money, Fiscal policy, taking the scope of Budgetary policy, refers to government policy that attempts to influence the direction of the economy through changes in government taxes A state is a political association with effective Sovereignty over a geographic Area and representing a Population. [134][135][136][137]
Ideologies and economics
For example, it is possible to associate the U. S. promotion of democracy by force in the 21st century, the 19th century work of Karl Marx or the cold war era debate of capitalism vs. Cold War is the state of conflict tension and competition that existed between the United States and the Soviet Union (USSR and their respective allies from the Capitalism is the Economic system in which the Means of production are owned by private Persons and operated for Profit and where communism, as issues of economics. Communism is a Socioeconomic structure that promotes the establishment of an egalitarian, classless, stateless Society based Although economics makes no such value claims, this may be one of the reasons why economics could be perceived as not being based on empirical observation and testing of hypothesis. As a social science, economics tries to focus on the observable consequences and efficiencies of different economic systems without necessarily making any value judgments about such systems, for example, examine the economics of authoritarian systems, egalitarian systems, or even a caste system without making judgments about the morality of any of them.
Ethics and economics
The relationship between economics and ethics is complex. Ethics is a major branch of Philosophy, encompassing right conduct and good life Many economists consider normative choices and value judgments, like what needs or wants, or what is good for society, to be political or personal questions outside the scope of economics. Once a person or government has established a set of goals, however, economics can provide insight as to how they might best be achieved.
Others see the influence of economic ideas, such as those underlying modern capitalism, to promote a certain system of values with which they may or may not agree. Capitalism is the Economic system in which the Means of production are owned by private Persons and operated for Profit and where (See, for example, consumerism and Buy Nothing Day. Consumerism is the equation of personal Happiness with the purchase of material possessions and consumption. Buy Nothing Day is an informal day of Protest against Consumerism observed by Social activists. ) According to some thinkers, a theory of economics is also, or implies also, a theory of moral reasoning. Moral reasoning is a study in Psychology that overlaps with Moral philosophy. [138]
The premise of ethical consumerism is that one should take into account ethical and environmental concerns, in addition to financial and traditional economic considerations, when making buying decisions. Ethical consumerism is buying products and services that are made ethically.
On the other hand, the rational allocation of limited resources toward public welfare and safety is also an area of economics. Some have pointed out that not studying the best ways to allocate resources toward goals like health and safety, the environment, justice, or disaster assistance is a sort of willful ignorance that results in less public welfare or even increased suffering. [139] In this sense, it would be unethical not to assess the economics of such issues. In fact, federal agencies in the United States routinely conduct economic analysis studies toward that end.
Effect on society
Some would say that market forms and other means of distribution of scarce goods, suggested by economics, affect not just their "desires and wants" but also "needs" and "habits". In Economics, market structure (also known as market form) describes the state of a Market with respect to competition Much of so-called economic "choice" is considered involuntary, certainly given by social conditioning because people have come to expect a certain quality of life. Quality of life is the degree of well-being felt by an individual or group of people This leads to one of the most hotly debated areas in economic policy, namely, the effect and efficacy of welfare policies. Libertarians view this as a failure to respect economic reasoning. Libertarianism is a term used by a broad spectrum of political philosophies which prioritize individual Liberty and seek to minimize or even abolish the They argue that redistribution of wealth is morally and economically wrong. Socialists view it as a failure of economics to respect society. Socialism refers to a broad set of economic theories of social organization advocating state or collective ownership and administration of the Means of production and distribution They argue that disparities of wealth should not have been allowed in the first place. This led to both 19th century labour economics and 20th century welfare economics before being subsumed into human development theory. Labour economics seeks to understand the functioning of the Market and dynamics for labour. Welfare economics is a branch of Economics that uses microeconomic techniques to simultaneously determine Allocative efficiency within an economy and the Human development theory is a theory that merges older ideas from Ecological economics, Sustainable development, Welfare economics, and Feminist
The older term for economics, political economy, is still often used instead of "economics", especially by certain economists such as Marxists. Political economy originally was the term for studying production buying and selling and their relations with law custom and government Marxism is the political philosophy and practice derived from the work of Karl Marx and Friedrich Engels. The use of this term often signals a basic disagreement with the terminology or paradigm of market economics. Political economy explicitly brings social political considerations into economic analysis and is therefore openly normative, although this can be said of many economic recommendations as well, despite claims to being positive. Normative has specialized meanings in several academic disciplines Some mainstream universities (many in the United Kingdom) have a "political economy" department rather than an "economics" department. The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located
Preoccupation with mathematics
Mainstream economics is often criticized for its focus on formalized mathematical theorems and technique over content, and its relative lack of attention to institutions, uncertainty, and real world problems. [140][141] Although much of the most groundbreaking economic research in history involved concepts rather than math, today it is nearly impossible to publish a non-mathematical paper in top economic journals. [142] Engineering Ph. D and economics graduate student Warren Gibson remarks that he had thought that economics would, similar to engineering, "leave the theorems and the existence proofs to the mathematicians and do everything possible to get to an answer", but he was surprised to find instead that "many of the economics papers . . . seem obsessed with math for its own sake, with real human problems hardly anywhere to be seen". [143] Widespread disillusionment with neoclassical economics lead to the dawn of the post-autistic economics movement, which began in France in 2000. The movement for Post-Autistic Economics ( PAE) was born through the work of Sorbonne Economist Bernard Guerrien.
Economics in practice
The professionalization of economics, reflected in the growth of graduate programs on the subject, has been described as "the main change in economics since around 1900. An economist is an expert in the Social science of Economics. "[144] Most major universities and many colleges have a major, school, or department in which academic degrees are awarded in the subject, whether in the liberal arts, business, or for professional study. A university is an institution of Higher education and Research, which grants Academic degrees in a variety of subjects A degree is any of a wide range of status levels conferred by institutions of Higher education, such as universities, normally as the result of successfully completing The term liberal arts refers to a particular type of educational Curriculum broadly defined as a Classical education. The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel (colloquially, the Nobel Prize in Economics) is a prize awarded to economists each year for outstanding intellectual contributions in the field. The Nobel Memorial Prize in Economic Sciences, officially named The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (Sveriges riksbanks pris i ekonomisk In the private sector, professional economists are employed as consultants and in industry, including banking and finance. A banker or bank is a Financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money The field of finance refers to the concepts of Time, Money and Risk and how they are interrelated Economists also work for various government departments and agencies, for example, the national Treasury, Central Bank or Bureau of Statistics. For the US government securities see Treasury security. Also see Treasury management. A central bank, reserve bank, or monetary authority is the entity responsible for the Monetary policy of a country or of a group of member states National statistical services International statistical services Eurostat United Nations Statistics Division - * UNESCO
See also
- Related topics
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Notes
- ^ Harper, Douglas (November 2001). An economy is the realized social system of production exchange distribution and consumption of goods and services of a country or other area Utilitarianism is the idea that the moral worth of an action is solely determined by its contribution to overall Utility, that is its contribution to happiness Politics Politics is the process by which groups of people make decisions This is an incomplete list of advocates of Utilitarianism. John Austin Jeremy Bentham Richard Brandt Jeremy Bentham ( IPA: or) (15 February 1748&ndash6 June 1832 was an English Jurist, Philosopher, and legal and Social reformer John Stuart Mill (20 May 1806 &ndash 8 May 1873 British Philosopher, political economist, civil servant and Member of Parliament, was an influential Henry Sidgwick ( May 31, 1838 – August 28, 1900) was an English Utilitarian Philosopher. Peter Albert David Singer (born July 6, 1946 in Melbourne, Victoria, Australia) is an Australian philosopher. Preference utilitarianism is quite probably the most popular form of Utilitarianism in contemporary philosophy Rule utilitarianism is a form of Utilitarianism which states that moral actions are those which conform to the rules which lead to the greatest good or that "the rightness Act utilitarianism is a Utilitarian theory of Ethics which states that the morally right action is the one which produces the greatest amount of happiness for the Two-level utilitarianism is a utilitarian theory of Ethics developed by R All proponents of Utilitarianism believe that the quality of conscious experience is important indeed it is the basis of their consequentialist approach to Ethics All proponents of Utilitarianism believe that the quality of conscious experience is important indeed it is the basis of their consequentialist approach to Ethics Utilitarianism is the idea that the moral worth of an action is solely determined by its contribution to overall Utility, that is its contribution to happiness Animal welfare refers to the viewpoint that it is morally acceptable for humans to use nonhuman animals for food in animal research, as clothing and in entertainment Abolitionism is a Bioethical school and movement which proposes the use of Biotechnology to maximize Happiness and minimize Suffering while Hedonism is the Philosophy that Pleasure is of ultimate importance, the most important pursuit Enlightened self-interest is a philosophy in Ethics which states that persons who act to further the interests of others (or the interests of the group or groups to David Hume (26 April 1711 25 August 1776 Scottish Philosopher, Economist, and Historian is an important figure in Western philosophy William Godwin ( 3 March 1756 &ndash 7 April 1836) was an English journalist political philosopher and Novelist Pain, in the sense of physical pain, is a typical sensory experience that may be described as the unpleasant awareness of a noxious stimulus or bodily harm Suffering, or pain, is an individual's basic Affective experience of unpleasantness and aversion associated with harm or threat of harm Pleasure is commonly conceptualized as a positive experience Happiness, Entertainment, Enjoyment, ecstasy, and euphoria, but is hard In Economics, utility is a measure of the relative satisfaction from or desirability of Consumption of various Goods and services. Happiness is an Emotion associated with feelings ranging from contentment and satisfaction to Bliss and intense Joy. Eudaimonia ( Greek:) is a classical Greek word commonly translated as ' Happiness ' Consequentialism refers to those moral theories which hold that the consequences of a particular action form the basis for any valid moral judgment about that action The felicific calculus is an Algorithm formulated by utilitarian philosopher Jeremy Bentham for calculating the degree or amount of Pleasure The mere addition paradox is a problem in Ethics, identified by Derek Parfit, and appearing in his book Reasons and Persons. The paradox of Hedonism, also called the pleasure paradox, is the idea in the study of Ethics which points out that Pleasure and Happiness The utility monster is a Thought experiment in the study of Ethics. Rational choice theory, also known as rational action theory, is a framework for understanding and often formally modeling social and economic behavior Game theory is a branch of Applied mathematics that is used in the Social sciences (most notably Economics) Biology, Engineering, Social choice theory studies voting rules that govern and describe how individual preferences are aggregated to form a collective preference Advertising is a form of Communication that typically attempts to persuade potential Customers to Purchase or to consume more of a particular Brand The Nobel Memorial Prize in Economic Sciences, officially named The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (Sveriges riksbanks pris i ekonomisk Barter is a type of Trade in which goods or services are directly exchanged Computational economics explores the intersection of economics and computation Some critics of Fractional reserve banking and the related monetary system may refer to it by the political term debt-based monetary system. The dismal science is a derogatory alternative name for Economics devised by the Victorian historian Thomas Carlyle in the 19th century The European Association for Evolutionary Political Economy ( EAEPE) is a Pluralist forum of Social scientists that brings together the theorists and Climate change is any long-term significant change in the “average weather” that a given region experiences The term " first world " refers to countries that are capitalist, which are technologically advanced and whose The term " Second World " is a phrase that was used to describe the Communist states within the Soviet Union 's sphere of influence Third World is a name given to nations that are generally considered to be underdeveloped economically The term Fourth World in academia sometimes refers to a sub-population subjected to social exclusion in global society but since the 1974 publication of The Fourth World An Indian Aid (from the french word aide, also known as international aid, overseas aid, or foreign aid, especially in the United States) is Economic calendar is a type of Calendar that is intended to inform financiers and traders about the scheduled major economic numbers (like CPI, A recession is a contraction phase of the Business cycle. The U Economic development is the development of economic wealth of countries or regions for the well-being of their inhabitants An economic indicator (or business indicator) is a Statistic about the economy. A recession is a contraction phase of the Business cycle. The U Economic sanctions are domestic penalties applied by one country (or group of countries on another for a variety of reasons Economic sociology is the Sociological analysis of economic phenomena Economy is a set of human and social activities and institutions related to the production distribution exchange and consumption of Goods and services. Ecological economics is a Transdisciplinary field of academic research within Economics that aims to address the interdependence between human economies and natural Feminist economics broadly refers to a developing branch of Economics that applies feminist lenses to economics An economist is an expert in the Social science of Economics. In Finance, the exchange rates (also known as the foreign-exchange rate, forex rate or FX rate) between two currencies specifies how The rising Technology has allowed our environment to be characterized as a global one Gross National Happiness (GNH is an attempt to define Quality of life in more holistic and psychological terms than Gross National Product. Happiness economics is the study of a country's Well-being by combining economists' and psychologists' techniques In popular usage "marketing" is the promotion of products especially Advertising and Branding However in professional usage the term has a wider meaning of Monetary policy is the process by which the Government, Central bank, or monetary authority of a country controls (i the Supply of Money, Money is anything that is generally accepted as Payment for Goods and services and repayment of Debts. In Economics, money supply, or money stock, is the total amount of money available in an Economy at a particular point in time An oligopoly is a Market form in which a Market or Industry is dominated by a small number of sellers (oligopolists Socioeconomics or socio-economics is the study of the relationship between economic activity and Social life. Trade is the willing exchange of goods, services, or both Trade is also called Commerce. The balance of trade (or net exports, sometimes symbolized as NX) is the difference between the monetary value of Exports and imports in an The balance of trade (or net exports, sometimes symbolized as NX) is the difference between the monetary value of Exports and imports in an The United States dollar ( sign: $; code: USD) is the unit of Currency of the United States; it has also been Wealth derives from the old English word "weal" which means "well-being The World Bank is an internationally supported Bank that provides financial and technical assistance to developing countries for development programs (e The world economy can be evaluated in various ways depending on the model used and this valuation can then be represented in various ways (for example in 2006 US dollars) This aims to be a complete list of the articles on Economics. Following is a list of accounting topics Accounting Ethics Accounting for risk Accounting information system See Business ethics, Political economy and Philosophy of business for an overview This is a list of business law topics within the field of Commercial law. Economic geography provides an overview of economic geography topics. An economic system is a System that involves the production, distribution and consumption of goods and services between This is an alphabetical list of notable Economists, that is experts in the social science of Economics. Topics in Finance include Fundamental financial concepts Finance an overview Arbitrage Organizational studies - an overview Organizational development Collaborative method Management Management information systems an overview E-business Intranet strategies This is a list of International trade topics. Absolute advantage Agreement on Trade-Related Aspects of Intellectual Property Rights This is a list of articles on general management and strategic management topics This is a list of marketing topics. Marketing fundamentals ] Consumer Business Marketing Manufacturing and manufacturing systems Manufacturing Factory Craft production English Macroeconomics Among the most important list of publication The following is a list of scholarly Journals in Economics, and contains most of the prominent journals in the field including those ranked highest in impact-adjusted Online Etymology Dictionary - Economy (HTML). Retrieved on October 27, 2007.
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- ^ Robbins, Lionel (1945). Lionel Charles Robbins Baron Robbins (1898 - 2008 was a British economist and adherent to the Austrian School of Economics. An Essay on the Nature and Significance of Economic Science. London: Macmillan and Co. , Limited. , p. 16
- ^ Friedman, David D. (2002). David Director Friedman (born February 12, 1945) is a writer who became a leading figure in the anarcho-capitalist community with the publication of his "Crime," The Concise Encyclopedia of Economics. Accessed October 21, 2007. Events 1512 - Martin Luther joins the theological faculty of the University of Wittenberg. Year 2007 ( MMVII) was a Common year starting on Monday of the Gregorian calendar in the 21st century.
- ^ The World Bank (2007). The World Bank Group (WBG is a family of five International organizations responsible for providing Finance and advice to countries for the purposes of economic "Economics of Education." Accessed October 21, 2007.
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- ^ Nordhaus, William D. (2002). William Dawbney "Bill" Nordhaus (b May 31, 1941, Albuquerque, New Mexico, USA) is the Sterling Professor of “The Economic Consequences of a War with Iraq,” in War with Iraq: Costs, Consequences, and Alternatives, pp. 51-85. American Academy of Arts and Sciences. Cambridge, MA. Accessed October 21, 2007.
- ^ Steven Pressman. Fifty Major Economists. (1999). Routledge. ISBN 0415134811 p. 20
- ^ Smith (1776) The Wealth of Nations. An Inquiry into the Nature and Causes of the Wealth of Nations is the Magnum opus of the Scottish economist Adam Smith. Book IV, Introduction, para 1.
- ^ *Groenwegen, Peter (1987). "'political economy' and 'economics'," The New Palgrave: A Dictionary of Economics, v. The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman 3, p. 904.
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- ^ James M. Buchanan (1987). James McGill Buchanan Jr (born October 3 1919 is an American Economist renowned for his work on Public choice theory, for which he won the 1986 "opportunity cost," The New Palgrave: A Dictionary of Economics, v. The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman 3, p. 718.
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- ^ Johnson, Paul M. (2005). "Specialization," A Glossary of Political Economy Terms.
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- ^ Tobin, James (1992). James Tobin ( March 5, 1918 March 11, 2002) was an American Economist. “money” (Money as a Social Institution and Public Good), The New Palgrave Dictionary of Finance and Money, v. 2, pp. 770-71.
- ^ Milton Friedman (1987). Milton Friedman (July 31 1912 November 16 2006 was an American Nobel Laureate Economist and Public intellectual. “quantity theory of money”, The New Palgrave: A Dictionary of Economics, v. 4, pp. 15-19.
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- ^ Hicks, John Richard (1939). Sir John Richard Hicks ( April 8, 1904 May 20, 1989) was one of the most important and influential Economists and Religious Inclusivists Value and Capital. Value and Capital is a book by the British economist John Richard Hicks, published in 1939 London: Oxford University Press. 2nd ed. , paper, 2001. ISBN 978-0198282693.
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- ^ This was described early by the Italian economist Enrico Barone in 1908. Enrico Barone ( December 22, 1859, Naples, Italy – May 14, 1924, Rome) was a soldier military historian and In 1939 the Soviet mathematician Leonid Kantorovich generalized and extended the analysis. Leonid Vitaliyevich Kantorovich ( January 19, 1912 in Saint Petersburg April 7, 1986 in Moscow) (Леонид Витальевич
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- ^ Quirk, James (1987). “qualitative economics," The New Palgrave: A Dictionary of Economics, v. 4, pp. 1-3.
- ^ Friedman Milton (1953). Milton Friedman (July 31 1912 November 16 2006 was an American Nobel Laureate Economist and Public intellectual. "The Methodology of Positive Economics," Essays in Positive Economics, University of Chicago Press, p. Milton Friedman 's book Essays in Positive Economics (1953 has as its lead an original essay "The Methodology of Positive Economics" on which this article focuses 10.
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- ^ Eatwell|, John, Murray Milgate, and Peter Newman, ed. (1987). Appendix IV, Subject Index, The New Palgrave: A Dictionary of Economics, v. The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman 4, pp. 980-88.
- ^ Blaug, Mark (2007). Mark Blaug (April 31927 The Hague, Netherlands - is a British economist (naturalised in 1982 who has covered a broad range of topics over his long career "The Social Sciences: Economics," Microeconomics, The New Encyclopædia Britannica, v. 27, pp. 347-49. Chicago. ISBN 0852294239
- ^ Varian, Hal R. (1987). Hal Ronald Varian (born March 18 1947 in Wooster Ohio) is an economist specialising in Microeconomics and Information technology. "microeconomics," The New Palgrave: A Dictionary of Economics, v. The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman 3, pp. 461-63. London and New York: Macmillan and Stockton. ISBN 0-333-37235-2
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- ^ Howitt, Peter M. (1987). "macroeconomics: relations with microeconomics". The New Palgrave: A Dictionary of Economics, pp. The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman 273-76. London and New York: Macmillan and Stockton. ISBN 0-333-37235-2.
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- ^ Blanchard, Olivier Jean (1987). "neoclassical synthesis," The New Palgrave: A Dictionary of Economics, v. The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman 3, pp. 634-36.
- ^ Debreu, Gerard (1987). Gérard Debreu (born July 4, 1921, Calais December 31, 2004, Paris) was a French-born economist and mathematician "mathematical economics," The New Palgrave: A Dictionary of Economics, v. The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman 3, pp. 401-03.
- ^ Hashem, M. Pesaren (1987). "econometrics", The New Palgrave: A Dictionary of Economics, v. The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman 2, p. 8.
- ^ Usher, D. (1987), "real income," The New Palgrave: A Dictionary of Economics, v. 4, p. 104.
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- ^ Ruggles, Nancy D. (1987), "social accounting". The New Palgrave: A Dictionary of Economicsdate=. The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman London and New York: Macmillan and Stockton, v. 3, 377. ISBN 0-333-37235-2.
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- ^ Samuelson, Paul A. , and William D. Nordhaus (2004). William Dawbney "Bill" Nordhaus (b May 31, 1941, Albuquerque, New Mexico, USA) is the Sterling Professor of Economics, ch. Economics is an introductory textbook by American economists Paul Samuelson and William Nordhaus. 18, "Protecting the Environment. " McGraw-Hill.
- ^ Ross, Stephen A. (1987). Stephen Alan "Steve" Ross is the inaugural Franco Modigliani Professor of Financial Economics at the MIT Sloan School of Management. "finance," The New Palgrave: A Dictionary of Economics, v. 2, pp. 322-26.
- ^ Aumann, R.J. (1987). Robert John Aumann ( Hebrew name: Yisrael Aumann he ישראל אומן (born June 8, 1930) is an Israeli Mathematician and a "game theory," The New Palgrave: A Dictionary of Economics, v. The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman 2, pp. 460-82.
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- ^ Freeman, R.B. (1987). Richard B Freeman (born 1943 is one of the leading labor economists in North America "labour economics," The New Palgrave: A Dictionary of Economics, v. 3, pp. 72-76.
- ^ Friedman, David (1987). David Director Friedman (born February 12, 1945) is a writer who became a leading figure in the anarcho-capitalist community with the publication of his "law and economics," The New Palgrave: A Dictionary of Economics, v. 3, p. 144.
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- ^ Blaug, Mark (2007). "The Social Sciences: Economics". The New Encyclopædia Britannica, v. 27, p. 343.
- ^ NA (2007). "physiocrat," The New Encyclopædia Britannica, v. 9, p. 414. .
- ^ Blaug, Mark (1997, 5th ed. ) Economic Theory in Retrospect, pp, 24-29, 82-84. Cambridge.
- ^ Blaug, Mark (2007). Mark Blaug (April 31927 The Hague, Netherlands - is a British economist (naturalised in 1982 who has covered a broad range of topics over his long career "The Social Sciences: Economics". The New Encyclopædia Britannica, v. 27, p. 343.
- ^ Blaug, Mark (1987). "classical economics". The New Palgrave: A Dictionary of Economics, v. The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman 1, pp. 434-35 Blaug notes less widely used datings and uses of 'classical economics', including those of Marx and Keynes. John Maynard Keynes 1st Baron Keynes CB (ˈkeɪnz "cains" (5 June 1883 &ndash 21 April 1946 was a British Economist whose ideas
- ^ Smith, Adam (1776). The Wealth of Nations, Bk. 1, Ch. 5, 6.
- ^ Roemer, J.E. (1987). John E Roemer is an American Economist and Political scientist. "Marxian Value Analysis". The New Palgrave: A Dictionary of Economics, v. The New Palgrave A Dictionary of Economics (1987 is a 4-volume reference edited by John Eatwell, Murray Milgate and Peter Newman 3, 383.
- ^ Mandel, Ernest (1987). Ernest Ezra Mandel, also known by various pseudonyms such as Ernest Germain, Pierre Gousset, Henri Vallin, Walter etc "Marx, Karl Heinrich", The New Palgrave: A Dictionary of Economicsv. 3, pp. 372, 376.
- ^ Vianello, Fernando (1987). "labour theory of value," The New Palgrave: A Dictionary of Economics, v. 3, pp. 111-12.
- ^ Baradwaj Krishna (1987). "vulgar economy," The New Palgrave: A Dictionary of Economics, v. 3, p. 831.
- ^ Campos, Antonietta (1987). "marginalist economics", The New Palgrave: A Dictionary of Economics, v. 3, p. 320
- ^ Hicks, J.R. (1937). Sir John Richard Hicks ( April 8, 1904 May 20, 1989) was one of the most important and influential Economists and Religious Inclusivists "Mr. Keynes and the 'Classics': A Suggested Interpretation," Econometrica, 5(2), pp. 147-159.
- ^ Blanchard, Olivier Jean (1987). "neoclassical synthesis," The New Palgrave: A Dictionary of Economics, v. 3, pp. 634-36.
- ^ Keynes, John Maynard (1936). The General Theory of Employment, Interest and Money. The General Theory of Employment Interest and Money was written by the English economist John Maynard Keynes. London: Macmillan. ISBN 1-57392-139-4.
- ^ Blaug, Mark (2007). "The Social Sciences: Economics," The New Encyclopædia Britannica, v. 27, p. 347. Chicago.
- ^ Tarshis, L. (1987). "Keynesian Revolution", The New Palgrave: A Dictionary of Economics, v. 3, pp. 47-50.
- ^ Samuelson, Paul A. , and William D. Nordhaus (2004). Economics, p. Economics is an introductory textbook by American economists Paul Samuelson and William Nordhaus. 5.
- ^ Blaug, Mark (2007). "The Social Sciences: Economics," The New Encyclopædia Britannica, v. 27, p. 346. Chicago.
- ^ Harcourt, G. C. (1987). "post-Keynesian economics," The New Palgrave: A Dictionary of Economics, v. 3, pp. 47-50.
- ^ Hume, David; Copley, Stephen and Edgar, Andrew, editors (1998). David Hume (26 April 1711 25 August 1776 Scottish Philosopher, Economist, and Historian is an important figure in Western philosophy "Of the Balance of Trade" Selected Essays. New York: Oxford University Press, USA, 188. ISBN 978-0192836212.
- ^ Smith (1776) The Wealth of Nations, v. An Inquiry into the Nature and Causes of the Wealth of Nations is the Magnum opus of the Scottish economist Adam Smith. I, Introduction and Plan of the Work, para. I.I.9 and Ch.5, para. I.5.2.
- ^ Mill, John Stuart (1848). John Stuart Mill (20 May 1806 &ndash 8 May 1873 British Philosopher, political economist, civil servant and Member of Parliament, was an influential Principles of Political Economy with Some of Their Applications to Social Philosophy. Boston: C. C. Little & J. Brown, 1, 8. ISBN 978-0192836212.
- ^ Ruskin, John (1860) The Veins of Wealth. John Ruskin (8 February 1819 &ndash 20 January 1900 is best known for his work as an Art critic, sage writer, and Social critic, but is remembered Cornhill Magazine. Retrieved on 2007-03-17. Year 2007 ( MMVII) was a Common year starting on Monday of the Gregorian calendar in the 21st century. Events 45 BC - In his last victory Julius Caesar defeats the Pompeian forces of Titus Labienus and Pompey the Younger Reprinted as Unto This Last, 1862
- ^ Ruskin, John (1860). John Ruskin (8 February 1819 &ndash 20 January 1900 is best known for his work as an Art critic, sage writer, and Social critic, but is remembered Ad Valorem. Cornhill Magazine. Retrieved on 2007-03-17. Year 2007 ( MMVII) was a Common year starting on Monday of the Gregorian calendar in the 21st century. Events 45 BC - In his last victory Julius Caesar defeats the Pompeian forces of Titus Labienus and Pompey the Younger Reprinted as Unto This Last, 1862
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- ^ The Origin of Economic Ideas, Guy Routh (1989)
- ^ Dr. Locke Carter (Summer 2006 graduate course) - Texas Tech University
- ^ Research Paper No. 2006/148 Ethics, Rhetoric and Politics of Post-conflict Reconstruction How Can the Concept of Social ContractHelp Us in Understanding How to Make Peace Work? Sirkku K. Hellsten, pg. 13
- ^ Political Communication: Rhetoric, Government, and Citizens, second edition, Dan F. Hahn
- ^ Johan Scholvinck, Director of the UN Division for Social Policy and Development in New York, Making the Case for the Integration of Social and Economic Policy, The Social Development Review
- ^ Bernd Hayo (Georgetown University & University of Bonn), Do We Really Need Central Bank Independence? A Critical Re- examination, IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut
- ^ Gabriel Mangano (Centre Walras-Pareto, University of Lausanne BFSH 1, 1015 Lausanne, Switzerland, and London School of Economics), Measuring central bank independence: a tale of subjectivity and of its consequences, Oxford Economic Papers. 1998; 50: 468-492
- ^ Friedrich Heinemann, Does it Pay to Watch Central Bankers’ Lips? The Information Content of ECB Wording, IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut
- ^ Stephen G. Cecchetti, Central Bank Policy Rules: Conceptual Issues and Practical Considerations, IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut
- ^ E. F. Schumacher: Small is Beautiful, Economics as if People matter.
- ^ Douglas Hubbard, "How to Measure Anything: Finding the Value of Intangibles in Business", John Wiley & Sons, 2007.
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External links
General information
- Economics at the Open Directory Project
- Resources For Economists: Official resource guide of the American Economic Association
- Research Papers in Economics (RePEc): huge database of preprints and other research
- Economic journals on the web
- Intute: Economics: Searchable human catalogue of the best links for teaching and research in Economics
- Economics, Encyclopædia Britannica
Institutions and organizations
- Economics Departments, Institutes and Research Centers in the World
- Organization For Co-operation and Economic Development (OECD) Statistics
- United Nations Statistics Division
- World Bank Data
- World Trade Organization
- Center for Economic and Policy Research (USA)
Study resources
- Economics textbooks on Wikibooks
- MERLOT Learning Materials: Economics: US-based database of learning materials
- Online Learning and Teaching Materials for Economics: The Economics Network (UK)'s database of text, slides, glossaries and other resources
- MIT OpenCourseWare: Economics: Archive of study materials from MIT courses
- A guide to several online economics textbooks
- The Library of Economics and Liberty (Econlib): Economics Books, Articles, Blog (EconLog), Podcasts (EconTalk)
- Schools of Thought: Compare various economic schools of thought on particular issues
- Economics at About.com
- Ask The Professor section of EH. The Open Directory Project ( ODP) also known as dmoz (from directory The American Economic Association, or AEA, is the oldest and most important professional organization in the field of Economics. Net Economic History Services
- Introduction to Economics: Short Creative commons-licensed introduction to basic economics
Dictionary
economics
-noun
- (Social sciences) The study of resource allocation, distribution and consumption; of capital and investment; and of management of the factors of production.
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