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Encyclopedia > Economics
Face-to-face trading interactions on the New York Stock Exchange trading floor. Financial decisions can be one of those many economic choices people make.
Face-to-face trading interactions on the New York Stock Exchange trading floor. Financial decisions can be one of those many economic choices people make.

Economics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Greek for oikos (house) and nomos (custom or law), hence "rules of the house(hold)."[1] The date of this image, (obtained from the file name of the source image) appears to be 6 April 2001. ... The date of this image, (obtained from the file name of the source image) appears to be 6 April 2001. ... The New York Stock Exchange (NYSE), nicknamed the Big Board, is a New York City-based stock exchange. ... The social sciences are a group of academic disciplines that study human aspects of the world. ... Distribution in economics is the way total output and income from it is distributed among individuals and among factors of production (such as between labor and capital) (Samuelson and Nordhaus, 2001, p. ... A good or commodity in economics is any object or service that increases utility, directly or indirectly, not be confused with good in a moral or ethical sense (see Utilitarianism and consequentialist ethical theory). ...


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."[2] Scarcity means that available resources are insufficient to satisfy all wants and needs. Absent scarcity and alternative uses of available resources, there is no economic problem. The subject thus defined involves the study of choices as they are affected by incentives and resources.
Lionel Charles Robbins, Baron Robbins (1898 - 1984) was a British economist of the 20th century who proposed one of the early contemporary definitions of economics, Economics is a science which studies human behavior as a relationship between ends and scarce means which have alternative uses. ... Lionel Robbins Essay (1932, 2nd ed. ... In economics, scarcity is defined as a condition of limited resources, where society does not have sufficient resources to produce enough to fulfill subjective wants. ... Classical economics distinguishes between three factors of production which are used in the production of goods: Land or natural resources - naturally-occurring goods such as soil and minerals. ... The basic economic problem is a term used in economic theory. ... Rational choice theory assumes human behavior is guided by instrumental reason. ...


Areas of economics may be divided or classified into various types, including:

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. Methods of economic analysis have been increasingly applied to fields that involve people (officials included) making choices in a social context, such as crime,[3] education,[4] the family, health, law, politics, religion,[5] social institutions, and war.[6] Microeconomics (or price theory) is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources,[1] typically in markets where goods or services are being bought and sold. ... Circulation in macroeconomics Macroeconomics is a branch of Economics that deals with the performance, structure, and behavior of the economy as a whole. ... Positive economics, value-free economics or wertfrei economics (from the German wertfrei, meaning value-free) is the part of economics that focuses on facts and cause-and-effect relationships. ... Normative economics is the branch of economics that incorporates value judgments about what the economy should be like or what particular policy actions should be recommended to achieve a desirable goal. ... Mainstream economics is the term used to distinguish the economics profession in general from advocates of various heterodox schools, including Austrian economics and Marxian economics. ... Heterodox economics [1] refers to approaches or schools of economic thought that do not conform to mainstream economics, which has largely developed from neoclassical economics in the late 19th century. ... Articles in economics journals are usually classified according to the system used by the Journal of Economic Literature (JEL). ... In economics, an agent is an element of a model who solves an optimization problem. ... The family, although recognized as fundamental from Adam Smith on, received little systematic treatment in economics before the 1950s. ... Law and economics, or economic analysis of law is an approach to legal theory that applies methods of economics to law. ... Public choice theory is a branch of economics that studies the decision-making behavior of voters, politicians and government officials from the perspective of economic theory. ... Institutional economics focuses on understanding the role of human-made institutions in shaping economic behavior. ...

Contents

In the beginning

Adam Smith, author of The Wealth of Nations (1776), generally regarded as initiating modern economics.
Adam Smith, author of The Wealth of Nations (1776), generally regarded as initiating modern economics.

Although discussions about production and distribution have a long history, economics in its modern sense is conventionally dated from the publication of Adam Smith's The Wealth of Nations in 1776.[7] In this work Smith describes the subject in these practical and exacting terms: Download high resolution version (1456x2173, 850 KB) This image has been released into the public domain by the copyright holder, its copyright has expired, or it is ineligible for copyright. ... Download high resolution version (1456x2173, 850 KB) This image has been released into the public domain by the copyright holder, its copyright has expired, or it is ineligible for copyright. ... Year 1776 (MDCCLXXVI) was a leap year starting on Monday (link will display the full calendar) of the Gregorian calendar (or a leap year starting on Thursday of the 11-day slower Julian calendar). ... Revisions and sourced additions are welcome; please only include historical figures. ... For other persons named Adam Smith, see Adam Smith (disambiguation). ... Adam Smith An Inquiry into the Nature and Causes of the Wealth of Nations is the magnum opus of the Scottish economist Adam Smith, published on March 9, 1776 during the Scottish Enlightenment. ...

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.

Smith referred to the subject as 'political economy', but that term was gradually replaced in general usage by 'economics' after 1870. The Politics series Politics Portal This box:      Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. ...


Areas of economics

Areas of economics may be classified in various ways, but an economy is usually analyzed by use of microeconomics or macroeconomics.


Microeconomics

Main article: Microeconomics

Microeconomics examines the economic behavior of agents (including individuals and firms) and their interactions through individual markets, given scarcity and government regulation. A given market might be for a product, say fresh corn, or the services of a factor of production, say bricklaying. The theory considers aggregates of quantity demanded by buyers and quantity supplied by sellers at each possible price per unit. 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. Market structures, such as perfect competition and monopoly, are examined as to implications for behavior and economic efficiency. Analysis often proceeds from the simplifying assumption that behavior in other markets remains unchanged, that is, partial-equilibrium analysis. General-equilibrium theory allows for changes in different markets and aggregates across all markets, including their movements and interactions toward equilibrium.[8][9] Microeconomics (or price theory) is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources,[1] typically in markets where goods or services are being bought and sold. ... In economics, an agent is an element of a model who solves an optimization problem. ... Government regulation involves the use of the law, mandated by the state, to produce outcomes which might not otherwise occur, prevent outcomes which might otherwise occur, produce or prevent outcomes in different places to what might otherwise occur, or produce or prevent outcomes in different timescales than would otherwise occur. ... Classical economics distinguishes between three factors of production which are used in the production of goods: Land or natural resources - naturally-occurring goods such as soil and minerals. ... In statistics, aggregate data describes data combined from several measurements. ... The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). ... Perfect competition is an economic model that describes a hypothetical market form in which no producer or consumer has the market power to influence prices. ... This article is about the economics of markets dominated by a single seller. ... There are several measures of economic efficiency: Pareto efficiency Kaldor-Hicks efficiency X-efficiency Allocative efficiency For applications of these principles see: Efficient market hypothesis Welfare economics Production theory basics See also Business efficiency Inefficiency ... Definition A partial equilibrium is a special case of the general economic equilibrium, where the clearance on the market of some specific goods is obtained independently from prices and quantities demanded and supplied on other goods markets. ... General Equilibrium (linear) supply and demand curves. ...


Macroeconomics

Main article: Macroeconomics

Macroeconomics examines the economy as a whole "top down" to explain broad aggregates and their interactions. Such aggregates include national income and output, the unemployment rate, and price inflation and subaggregates like total consumption and investment spending and their components. It also studies effects of monetary policy and fiscal policy. 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.[10] This has addressed a long-standing concern about inconsistent developments of the same subject.[11] Analysis also considers factors affecting the long-term level and growth of national income within a country and across countries.[12][13] Circulation in macroeconomics Macroeconomics is a branch of Economics that deals with the performance, structure, and behavior of the economy as a whole. ... Template:Push up GNP redirects here. ... It has been suggested that monetary theory be merged into this article or section. ... Fiscal policy is the economic term that defines the set of principles and decisions of a government in setting the level of public expenditure and how that expenditure is funded. ... In economics, the term microfoundations refers to the microeconomic analysis of the behavior of individual agents such as households or firms that underpins a macroeconomic theory (Barro, 1993, Glossary, p. ... Rational expectations is a theory in economics originally proposed by John F. Muth (1961) and later developed by Robert E. Lucas Jr. ... In finance, the efficient market hypothesis (EMH) asserts that financial markets are informationally efficient, or that prices on traded assets, e. ... In economic theory, imperfect competition, is the competitive situation in any market where the conditions necessary for perfect competition are not satisfied. ... World GDP/capita changed very little for most of human history before the industrial revolution. ...


Related fields, other distinctions, and classifications

Recent developments closer to microeconomics include behavioral economics and experimental economics. Fields bordering on other social sciences include economic geography, economic history, public choice, cultural economics, and institutional economics. Nobel Prize in Economics winner Daniel Kahneman, was an important figure in the development of behavioral finance and economics and continues to write extensively in the field. ... Experimental economics is the use of experimental methods to evaluate theoretical predictions of economic behaviour. ... The social sciences are a group of academic disciplines that study human aspects of the world. ... Economic geography is the study of the location, distribution and spatial organisation of economic activities across the Earth. ... Economic history is the study of economic change, and of economic phenomena in the past. ... Public choice theory is a branch of economics that studies the decision-making behavior of voters, politicians and government officials from the perspective of economic theory. ... Articles in economics journals are usually classified according to the system used by the Journal of Economic Literature (JEL). ... Institutional economics focuses on understanding the role of human-made institutions in shaping economic behavior. ...


Another division of the subject distinguishes two types of economics. Positive economics ("what is") seeks to explain economic phenomena or behavior. Normative economics ("what ought to be," often as to public policy) prioritizes choices and actions by some set of criteria; such priorities reflect value judgments, including selection of the criteria. Positive economics, value-free economics or wertfrei economics (from the German wertfrei, meaning value-free) is the part of economics that focuses on facts and cause-and-effect relationships. ... Normative economics is the branch of economics that incorporates value judgments about what the economy should be like or what particular policy actions should be recommended to achieve a desirable goal. ...


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." [14] Mainstream economics is the term used to distinguish the economics profession in general from advocates of various heterodox schools, including Austrian economics and Marxian economics. ... Heterodox economics [1] refers to approaches or schools of economic thought that do not conform to mainstream economics, which has largely developed from neoclassical economics in the late 19th century. ...


The JEL classification codes of the Journal of Economic Literature provide a comprehensive, detailed way of classifying and searching for economics articles by subject matter. An alternative classification of often-detailed entries by mutually-exclusive categories and subcategories is The New Palgrave: A Dictionary of Economics (1987).[15] 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. ...


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. It uses such methods as calculus and matrix algebra. Expositors cite its advantage in allowing formulation and derivation of key relationships in an economic model with clarity, generality, rigor, and simplicity.[16] For example, Paul Samuelson's book Foundations of Economic Analysis (1947) identifies a common mathematical structure across multiple fields in the subject. Mathematical economics is the sub-field of economics that explores the mathematical aspects of economic systems. ... A mathematical problem is a problem that can be solved with the help of mathematics. ... For other uses, see Calculus (disambiguation). ... ... A diagram of the IS/LM model In economics, a model is a theoretical construct that represents economic processes by a set of variables and a set of logical and quantitative relationships between them. ... Paul Anthony Samuelson (born May 15, 1915, in Gary, Indiana) is an American neoclassical economist known for his contributions to many fields of economics, beginning with his general statement of the comparative statics method in his 1947 book Foundations of Economic Analysis. ... Foundations of Economic Analysis is a book by Paul A. Samuelson published in 1947 (Enlarged ed. ...


Econometrics

Main article: Econometrics

Econometrics applies mathematical and statistical methods to analyze data related to economic models. For example, a theory may hypothesize that a person with more education will on average earn more income than person with less education holding everything else equal. Econometric estimates can estimate the magnitude and statistical significance of the relation. 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.[17] Econometrics is concerned with the tasks of developing and applying quantitative or statistical methods to the study and elucidation of economic principles. ... A graph of a bell curve in a normal distribution showing statistics used in educational assessment, comparing various grading methods. ... Economic data are usually numerical time-series, i. ... A diagram of the IS/LM model In economics, a model is a theoretical construct that represents economic processes by a set of variables and a set of logical and quantitative relationships between them. ... In statistics, a result is significant if it is unlikely to have occurred by chance, given that a presumed null hypothesis is true. ...


National accounting

Main article: National accounts

National accounting is a method for summarizing economic activity of a nation. The national accounts are double-entry accounting systems that provide detailed underlying measures of such information. These include the national income and product accounts (NIPA), which provide estimates for the money value of output and income per year or quarter. NIPA allows for tracking the performance of an economy and its components through business cycles or over longer periods. Price data may permit distinguishing nominal from real amounts, that is, correcting money totals for price changes over time.[18][19] The national accounts also include measurement of the capital stock, wealth of a nation, and international capital flows.[20] Measures of national income and output are used in economics to estimate the value of goods and services produced in an economy. ... This article does not cite any references or sources. ... 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 that production generates. ... An abstract business cycle The business cycle or economic cycle refers to the ups and downs seen somewhat simultaneously in most parts of an economy. ... Nominal value is the value of anything expressed in money of the day, versus real value which removes the effect of inflation. ... Capital has a number of related meanings in economics, finance and accounting. ... In economics wealth of a person or nation is the value of assets owned minus the value of liabilities owed (to foreigners in the case of a nation) at a point in time. ... International economics is a branch of economics with two main subdisciplines international trade and international finance. ...


Selected fields

Development and growth economics

Chart of World GDP per capita by region over the last 2000 years. GDP per capita is a convenient summary measure of long-term economic development.
Chart of World GDP per capita by region over the last 2000 years. GDP per capita is a convenient summary measure of long-term economic development.

Growth economics studies factors that explain economic growth – the increase in output per capita of a country over a longer period of time. 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. These are represented in theoretical and empirical forms (as in the neoclassical growth model) and in growth accounting. At a more specific level, development economics examines economic aspects of the development process in relatively low-income countries with a focus on methods of promoting economic growth. Approaches in development economics frequently incorporate social and political factors to devise particular plans.[21][22][23][24] World GDP/capita changed very little for most of human history before the industrial revolution. ... This article does not cite any references or sources. ... Image File history File links Download high resolution version (1023x783, 44 KB) Summary Data Source: Angus Maddisons World Population, GDP and Per Capita GDP, 1-2003 AD (This Microsoft Excel file can also be read by using the free Open office) at The Groningen Growth and Development Centre. ... Image File history File links Download high resolution version (1023x783, 44 KB) Summary Data Source: Angus Maddisons World Population, GDP and Per Capita GDP, 1-2003 AD (This Microsoft Excel file can also be read by using the free Open office) at The Groningen Growth and Development Centre. ... World GDP/capita changed very little for most of human history before the industrial revolution. ... Per capita is a Latin phrase meaning for each head. ... Invest redirects here. ... Theoretical Human population increase from 10,000 BC – 2000 AD. Population growth is the change in population over time, and can be quantified as the change in the number of individuals in a population per unit time. ... A technological change is a term that is used in economics to describe a change in the set of feasible production possibilities. ... A central concept in science and the scientific method is that all evidence must be empirical, or empirically based, that is, dependent on evidence or consequences that are observable by the senses. ... 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 model of long-run economic growth within the framework of neoclassical economics. ... Growth accounting is a set of theories used in economics to explain economic growth. ... A developing country is a country with low average income compared to the world average. ...


Economic systems

Main article: Economic system

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 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. In between are mixed economies. A common element is the interaction of economic and political influences, broadly described as political economy. Comparative economic systems studies the relative performance and behavior of different economies or systems.[25][26] An economic system is a particular set of social institutions which deals with the production, distribution and consumption of goods and services in a particular society. ... An institution is a group, tenet, maxim, or organization created by a group of humans. ... This article refers to an economy controlled by the state. ... For other uses, see Capitalism (disambiguation). ... A mixed economy is an economy that contains both private and publically, or state owned (or controlled) enterprises. ... The Politics series Politics Portal This box:      Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. ... Comparative economic systems is the subfield of economics dealing with the comparative study of different systems of economic organization, such as capitalism, socialism, feudalism and the mixed economy. ...


Environmental economics

Environmental economics is concerned with issues related to degradation, enhancement, or preservation of the environment. In particular, public bads from production or consumption, such as air pollution, can lead to market failure. 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.[27][28] Environmental economics is a subfield of economics concerned with environmental issues (other usages of the term are not uncommon). ... A public bad, in green economics, is a good that produces socially undesirable results. ... Market failure is a term used by economists to describe the condition where the allocation of goods and services by a market is not efficient. ... Cost-benefit analysis is an important technique for project appraisal: the process of weighing the total expected costs against the total expected benefits of one or more actions in order to choose the best or most profitable option. ... Emissions trading (or cap and trade) is an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. ...


Financial economics

Main article: Financial economics

Financial economics, often simply referred to as finance, is concerned with the allocation of financial resources in an uncertain (or risky) environment. Thus, its focus is on the operation of financial markets, the pricing of financial instruments, and the financial structure of companies.[29] Financial economics is the branch of economics concerned with resource allocation over time. ... Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. ... Lets talk about risk control strategies, anyone with more information and willing to share, please do so. ... This article does not cite any references or sources. ... Financial instruments package financial capital in readily tradeable forms - they do not exist outside the context of the financial markets. ... Gearing ratios redirects here. ...


Game theory

Main article: Game theory

Game theory is a branch of applied mathematics that studies strategic interactions between agents. In strategic games, agents choose strategies that will maximize their payoff, given the strategies the other agents choose. 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. The field dates from the 1944 classic Theory of Games and Economic Behavior by John von Neumann and Oskar Morgenstern. It has found significant applications in many areas outside economics as usually construed, including formulation of nuclear strategies, ethics, political science, and evolutionary theory.[30] Game theory is a branch of applied mathematics that is often used in the context of economics. ... 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. ... Strategy games are typically board games, video or computer games with the players decision-making skills having a high significance in determining the outcome. ... In economics, an agent is an element of a model who solves an optimization problem. ... The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). ... In 1944 Princeton University Press published Theory of Games and Economic Behavior, a book by the mathematician John von Neumann and economist Oskar Morgenstern. ... For other persons named John Neumann, see John Neumann (disambiguation). ... Oskar Morgenstern (January 24, 1902 - July 26, 1977) was an German- American economist who, working with John von Neumann, helped found the mathematical field of game theory. ... Wikipedia does not yet have an article with this exact name. ... Game theory is a branch of applied mathematics that is often used in the context of economics. ... Game theory is a branch of applied mathematics that is often used in the context of economics. ... This article is about biological evolution. ...


Industrial organization

Industrial organization 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.[31] Industrial organization is the field of economics that studies the behavior of firms, the structure of markets and of their interactions. ... Perfect competition is an economic model that describes a hypothetical market form in which no producer or consumer has the market power to influence prices. ... Monopolistic competition is a common market form. ... This article does not cite any references or sources. ... This article is about the economics of markets dominated by a single seller. ...


Information economics

Main article: Information economics

Information economics examines how information (or a lack of it) affects economic decision-making. An important focus is the concept of information asymmetry, where one party has more or better information than the other. The existence of information asymmetry gives rise to problems such as moral hazard, and adverse selection, studied in contract theory. The economics of information has relevance in many fields, including finance, insurance, contract law, and decision-making under risk and uncertainty. Information economics is a branch of microeconomic theory (classified under JEL code D8) that studies how information affects economic decisions. ... In economics and contract theory, an information asymmetry is present when one party to a transaction has more or better information than the other party. ... This section is studied by Argagui monopoli In law and economics, moral hazard is the name given to the risk that one party to a contract can change their behaviour to the detriment of the other party once the contract has been concluded. ... Adverse selection or anti-selection is a term used in economics and insurance. ... Contract theory comprises many different theories and various interpretations of the various body of rules and subrules that define Contract Law. ... Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. ... 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 any promise or set of promises made by one party to another for the breach of which the law provides a remedy. ...


International economics

International trade studies the determinants of the flow of goods and services across international boundaries. International finance is a macroeconomic field which examines the flow of capital across international borders, and the effects of these movements on exchange rates. Increased trade in goods, services and capital between countries is a major effect of contemporary globalization. International trade is the exchange of goods and services across international boundaries or territories. ... International finance is the branch of economics that studies the dynamics of exchange rates, foreign investment, and how these affect international trade. ... International finance is the branch of economics that studies the dynamics of exchange rates, foreign investment, and how these affect international trade. ... Not to be confused with capitol. ... A KFC franchise in Kuwait. ...


Labour economics

Main article: Labour economics

Labour economics seeks to understand the functioning of the market and dynamics for labour. Labour markets function through the interaction of workers and employers. 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.[32] Construction workers generally work long hours for their pay Labor economics seeks to understand the functioning of the market and dynamics for labor. ... Look up Market in Wiktionary, the free dictionary. ... In classical economics and all micro-economics labour is a measure of the work done by human beings and is one of three factors of production, the others being land and capital. ... Labour economics seeks to understand the functioning of the market for labour. ... In economics, full employment has more than one meaning. ...


Law and economics

Main article: Law and Economics

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 laws, to assess which legal rules are economically efficient, and to predict what the legal rules will be.[33][34] A seminal article by Ronald Coase published in 1961 suggested that well-defined property rights could overcome the problems of externalities.[35] Law and economics, or economic analysis of law is an approach to legal theory that applies methods of economics to law. ... There are several measures of economic efficiency: Pareto efficiency Kaldor-Hicks efficiency X-efficiency Allocative efficiency For applications of these principles see: Efficient market hypothesis Welfare economics Production theory basics See also Business efficiency Inefficiency ... Ronald Harry Coase (b. ... An externality occurs in economics when a decision (for example, to pollute the atmosphere) causes costs or benefits to individuals or groups other than the person making the decision. ...


Managerial economics

Main article: Managerial economics

Managerial economics applies microeconomic analysis to specific decisions in business firms or other management units. 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. 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 conditons.[36] [37] Managerial economics (also called business economics), is a branch of economics that applies microeconomic analysis to specific business decisions. ... Microeconomics is the study of the economic behaviour of individual consumers, firms, and industries and the distribution of production and income among them. ... Operations Research or Operational Research (OR) is an interdisciplinary branch of mathematics which uses methods like mathematical modeling, statistics, and algorithms to arrive at optimal or good decisions in complex problems which are concerned with optimizing the maxima (profit, faster assembly line, greater crop yield, higher bandwidth, etc) or minima... In statistics, regression analysis examines the relation of a dependent variable (response variable) to specified independent variables (explanatory variables). ... 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 by systematically choosing the values of real or integer variables from within an allowed set. ...


Public finance

Main article: Public finance

Public finance is the field of economics that deals with budgeting the revenues and expenditures of a public sector entity, usually government. 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. The latter, an aspect of public choice theory, models public-sector behavior analogously to microeconomics, involving interactions of self-interested voters, politicians, and bureaucrats.[38] This article does not cite any references or sources. ... < [[[[math>Insert formula here</math>The public sector is that part of economic and administrative life that deals with the delivery of goods and services by and for the [[government </math></math></math></math> Direct administration funded through taxation; the delivering organisation generally has no specific requirement to meet commercial... First discussed by the Physiocrats in France, tax incidence is the analysis of the effect of a particular tax on the distribution of economic welfare. ... There are several measures of economic efficiency: Pareto efficiency Kaldor-Hicks efficiency X-efficiency Allocative efficiency For applications of these principles see: Efficient market hypothesis Welfare economics Production theory basics See also Business efficiency Inefficiency ... This graphic shows the distribution of gross annual household income. ... Public choice theory is a branch of economics that studies the decision-making behavior of voters, politicians and government officials from the perspective of economic theory, namely game theory and decision theory. ...


Welfare economics

Main article: 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. It attempts to measure social welfare by examining the economic activities of the individuals that comprise society.[39] Welfare economics is a branch of economics that uses microeconomic techniques to simultaneously determine the allocational efficiency of a macroeconomy and the income distribution associated with it. ... Microeconomics (or price theory) is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources,[1] typically in markets where goods or services are being bought and sold. ... Allocative efficiency is the market condition whereby resources are allocated in a way that maximizes the net benefit attained through their use. ... Distribution in economics is the way total output and income from it is distributed among individuals and among factors of production (such as between labor and capital) (Samuelson and Nordhaus, 2001, p. ... ...


Economic concepts

Supply and demand

Main article: Supply and demand
The supply and demand model describes how prices vary as a result of a balance between product availability and demand. The graph depicts an increase (that is, right-shift) in demand from D1 to D2 along with the consequent increase in price and quantity required to reach a new equilibrium point on the supply curve (S).

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. In microeconomic theory, it refers to price and output determination in a perfectly competitive market. This has served as a building block for modeling other market structures and for other theoretical approaches. The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). ... Image File history File links Supply-demand-right-shift-demand. ... Image File history File links Supply-demand-right-shift-demand. ... The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). ... Look up Market in Wiktionary, the free dictionary. ... Microeconomics (or price theory) is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources,[1] typically in markets where goods or services are being bought and sold. ... Perfect competition is an economic model that describes a hypothetical market form in which no producer or consumer has the market power to influence prices. ...


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. A term for this is 'constrained utility maximization' (with income as the "constraint" on demand). Here, 'utility' refers to the (hypothesized) preference relation for individual consumers. 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 buy of it (other things unchanged). 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). 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. A good or commodity in economics is any object or service that increases utility, directly or indirectly, not be confused with good in a moral or ethical sense (see Utilitarianism and consequentialist ethical theory). ... Consumer theory is a theory of economics. ... Rational choice theory assumes human behavior is guided by instrumental reason. ... Consumer theory is a theory of economics. ... In economics, utility is a measure of the relative happiness or satisfaction (gratification) gained. ... Ceteris paribus is a Latin phrase, literally translated as with other things [being] the same, and usually rendered in English as all other things being equal. ... Purchasing Power- the amount of value of a good/services compared to the amount paid. ... Consumer theory relates preferences, indifference curves and budget constraints to consumer demand curves. ... Consumer theory relates preferences, indifference curves and budget constraints to consumer demand curves. ...


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. A diagram of the IS/LM model In economics, a model is a theoretical construct that represents economic processes by a set of variables and a set of logical and quantitative relationships between them. ... It has been suggested that Equilibrium price be merged into this article or section. ...


For a given quantity of a good, the price point on the demand curve indicates the value, or marginal utility[40] to consumers for that unit of output. 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. The price in equilibrium is determined by supply and demand. In a perfectly competitive market, supply and demand equate cost and value at equilibrium.[41] “Marginal revolution” redirects here. ... In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit. ... Perfect competition is an economic model that describes a hypothetical market form in which no producer or consumer has the market power to influence prices. ...


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. 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. for production) and supply of labour (from workers). Distribution in economics is the way total output and income from it is distributed among individuals and among factors of production (such as between labor and capital) (Samuelson and Nordhaus, 2001, p. ... In economics, factors of production are resources used in the production of goods and services, including land, labor, and capital. ... Construction workers generally work long hours for their pay Labor economics seeks to understand the functioning of the market and dynamics for labor. ...


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 macroeconomic variables in a market economy, for example, quantity of total output and the general price level. Macroeconomics is the study of the entire economy in terms of the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the general behavior of prices. ... A market economy (also called a free market economy or a free enterprise economy) is an economic system in which the production and distribution of goods and services take place through the mechanism of free markets guided by a free price system. ... In economics, the gross domestic product (GDP) is a measure of the amount of the economic production of a particular territory in financial capital terms during a specific time period. ... The price level is a measurement of the average level of prices in an economy. ...


Prices and quantities

Main articles: Price and Prices and quantities
Even a currency has a price, its exchange rate in currency markets. Its determination by supply and demand is an important issue in international trade.

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.[42] 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. Economic theory can specify under what circumstances price demonstrably serves as an efficient communication device to regulate quantity.[43] A real-world counterpart might attempt to measure how much variables that increase supply or demand change price and quantity. In economics and business, the price is the assigned numerical monetary value of a good, service or asset. ... In economics, the nominal values of something are its money values in different years. ... Download high resolution version (2392x1561, 621 KB) Wikipedia does not have an article with this exact name. ... Download high resolution version (2392x1561, 621 KB) Wikipedia does not have an article with this exact name. ... International trade is the exchange of goods and services across international boundaries or territories. ... Microeconomics (or price theory) is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources,[1] typically in markets where goods or services are being bought and sold. ... Circulation in macroeconomics Macroeconomics is a branch of Economics that deals with the performance, structure, and behavior of the economy as a whole. ...


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.[44] 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. 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. // [edit] Introduction [edit] Definition If we were to take snapshots of an economy at different points in time, no two photos would look alike. ... Circulation in macroeconomics Macroeconomics is a branch of Economics that deals with the performance, structure, and behavior of the economy as a whole. ... Perfect competition is an economic model that describes a hypothetical market form in which no producer or consumer has the market power to influence prices. ...


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. 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.[45] In economics, an externality is an impact (positive or negative) on anyone not party to a given economic transaction. ...


Marginalism

Main article: Marginalism

Marginalist economic theory, such as above, describes consumers as attempting to reach a most-preferred position, subject to constraints, including income and wealth. 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. Analogously, a producer compares marginal revenue against marginal cost of a good, with the difference as marginal profit. 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. Marginalism is the use of marginal concepts within economics. ... Marginalism is the use of marginal concepts within economics. ... Income, generally defined, is the money that is received as a result of the normal business activities of an individual or a business. ... In economics wealth of a person or nation is the value of assets owned minus the value of liabilities owed (to foreigners in the case of a nation) at a point in time. ... “Marginal revolution” redirects here. ... In microeconomics, Marginal Revenue (MR) is the extra revenue that an additional unit of product will bring a firm. ... In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit. ...


Related conditions and considerations apply more generally to any type of economic system, whether market-based or not, where there is scarcity.[46] Scarcity is defined by the amount of producible or exchangeable goods, whether needed or desired, exceeding feasible production.[47] The conditions are in the form of constraints on production from finite resources available. Such resource constraints describe a menu of production possibilities. For consumers or other agents, production possibilities and scarcity are posited to imply that, even if resources are fully utilized, there are trade-offs, whether of radishes for carrots, non-work time for money income, private goods for public goods, or present consumption for future consumption. The marginalist notion of opportunity cost is a device to measure the size of the trade-off between competing alternatives. Such costs, reflected in prices of a market economy, are used for analysis of economic efficiency or for predicting responses to disturbances in a market economy. In a centrally planned economy, comparable shadow-price relations must be satisfied for the efficient use of resources in meeting production objectives.[48] At this level, marginalism can be used as a tool for modeling not only individual agents or markets but different economic systems and broad allocations of output in relation to variables that affect them. An economic system is a particular set of social institutions which deals with the production, distribution and consumption of goods and services in a particular society. ... In economics, scarcity is defined as a condition of limited resources, where society does not have sufficient resources to produce enough to fulfill subjective wants. ... A good in economics is any object or service that, upon consumption, increases utility, and therefore can be sold at a price in a market. ... In economics, factors of production are resources used in the production of goods and services, including land, labor, and capital. ... In economics, the production possibility frontier (the PPF, also called the production possibilities curve (PPC) or the “transformation curve”) is a graph that depicts the trade-off between any two items produced. ... In economics, the production possibility frontier (the PPF, also called the production possibilities curve (PPC) or the “transformation curve”) is a graph that depicts the trade-off between any two items produced. ... A Tradeoff usually refers to losing one quality or aspect of something in return for gaining another quality or aspect. ... A private good is defined in economics as a good that exhibits these properties: Excludable (also referred in this context as rivalry) - cannot be consumed by everybody since consumption by one person reduces or excludes consumption by another. ... In economics, opportunity cost, or economic cost, is the cost of something in terms of an opportunity forgone (and the benefits which could be received from that opportunity), or the most valuable forgone alternative (or highest-valued option forgone), i. ... There are several measures of economic efficiency: Pareto efficiency Kaldor-Hicks efficiency X-efficiency Allocative efficiency For applications of these principles see: Efficient market hypothesis Welfare economics Production theory basics See also Business efficiency Inefficiency ... This article refers to an economy controlled by the state. ... A shadow price is the change in the objective value of the optimal solution of an optimization problem obtained by relaxing the right hand side of the constraint by one unit. ...


Economic reasoning

Economics as a contemporary discipline relies on rigorous styles of argument. Objectives include formulating theories that are simpler, more fruitful, and more reliable in their explanatory power than other theories.[49] Often analysis begins with a simple model to isolate relations of a variable to be explained. Complications may be impounded in a ceteris paribus ("other things equal") assumption. For example, the quantity theory of money hypothesizes a positive relationship between the price level and the money supply, ceteris paribus. The theory can be tested using economic data, such as a price index for GDP and a measure of the money supply, say currency plus bank deposits. Econometric methods can allow for the influence of competing explanations and attempt to adjust for noise from other variables in the absence of a controlled experiment. More recently, the use of experimental methods in economics has greatly expanded, challenging a historically-noted differentiating feature of some natural sciences from economics.[50] A diagram of the IS/LM model In economics, a model is a theoretical construct that represents economic processes by a set of variables and a set of logical and quantitative relationships between them. ... Ceteris paribus is a Latin phrase, literally translated as with other things [being] the same, and usually rendered in English as all other things being equal. ... In economics, the velocity of money refers to a key term in the quantity theory of money, which centers on the equation of exchange: where is the total amount of money in circulation in an economy at any one time (say, on average during a month). ... The price level is a measurement of the average level of prices in an economy. ... In macroeconomics, money supply (monetary aggregates, money stock) is the quantity of currency and money in bank accounts in the hands of the non-bank public available within the economy to purchase goods, services, and securities. ... Economic data are usually numerical time-series, i. ... In economics, the GDP deflator (implicit price deflator for GDP) is a measure of the change in prices of all new, domestically produced, final goods and services in an economy. ... In the scientific method, an experiment (Latin: ex- periri, of (or from) trying) is a set of observations performed in the context of solving a particular problem or question, to support or falsify a hypothesis or research concerning phenomena. ... Experimental economics is the use of experimental methods to evaluate theoretical predictions of economic behaviour. ... The Michelson–Morley experiment was used to disprove that light propagated through a luminiferous aether. ...


Expositions of reasoning within economic models often use two-dimensional graphs to represent theoretical relationships. At a higher level of generality, Paul Samuelson's treatise Foundations of Economic Analysis (1947) showed how to apply mathematical methods to examine the class of assertions called operationally meaningful theorems in economics, which are theorems that can conceivably be refuted by empirical data.[51] Such assertions permit testing of a theory. Paul Anthony Samuelson (born May 15, 1915, in Gary, Indiana) is an American neoclassical economist known for his contributions to many fields of economics, beginning with his general statement of the comparative statics method in his 1947 book Foundations of Economic Analysis. ... Foundations of Economic Analysis is a book by Paul A. Samuelson published in 1947 (Enlarged ed. ... Look up theorem in Wiktionary, the free dictionary. ... A central concept in science and the scientific method is that all evidence must be empirical, or empirically based, that is, dependent on evidence or consequences that are observable by the senses. ...


Some reject mathematical economics. Thus, in the Austrian school of economics it is argued that anything beyond simple logic is likely unnecessary and inappropriate for economic analysis. Still, economics has undergone a thorough, cumulative formalization of concepts and methods, including for use in the hypothetico-deductive method of explaining real-world phenomena. An example of the latter is the extension of microeconomic analysis to seemingly non-economic areas, sometimes called economic imperialism.[52] The Austrian School, also known as the Vienna School or the Psychological School, is a school of economic thought that advocates adherence to strict methodological individualism. ... This article or section should include material from Hypothetico deductive model The hypothetico-deductive method is a theory about scientific method. ... Cultural imperialism is the practice of promoting the culture or language of one nation in another. ...


History and schools of economics

Main articles: History of economic thought and Schools of economics

It has been suggested that History of economics be merged into this article or section. ... This article is a list connected to the template History of economic thought. ...

Early economic thought

Formative economic writings date from ancient times, including Mesopotamian, Greek, Roman, Indian, Chinese, Persian and Arab civilizations. Notable writers include Aristotle, Chanakya, Qin Shi Huang, Thomas Aquinas, and Ibn Khaldun through the 14th century. Joseph Schumpeter credits the late scholastics of the 14th to 17th century 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.[53] Ancient economic thought refers to economics ideas from people before the middle ages. ... Mesopotamia was a cradle of civilization geographically located between the Tigris and Euphrates rivers, largely corresponding to modern-day Iraq. ... Ancient Rome was a civilization that grew from a small agricultural community founded on the Italian Peninsula circa the 9th century BC to a massive empire straddling the Mediterranean Sea. ... Persia redirects here. ... The Arab Empire at its greatest extent The Arab Empire usually refers to the following Caliphates: Rashidun Caliphate (632 - 661) Umayyad Caliphate (661 - 750) - Successor of the Rashidun Caliphate Umayyad Emirate in Islamic Spain (750 - 929) Umayyad Caliphate of Córdoba in Islamic Spain (929 - 1031) Abbasid Caliphate (750-1258... This article is about the philosopher. ... Chānakya (Sanskrit: चाणक्य) (c. ... The monarch known now as Qin Shi Huang (Chinese: ; Pinyin: ; Wade-Giles: Chin Shih-huang) (November / December 260 BCE – September 10, 210 BCE), personal name Yíng Zhèng, was king of the Chinese State of Qin from 247 BCE to 221 BCE (officially still under the Zhou Dynasty... Saint Thomas Aquinas, O.P.(also Thomas of Aquin, or Aquino; c. ... Ibn Khaldūn or Ibn Khaldoun (full name Arabic: , ) (May 27, 1332/732AH – March 19, 1406/808AH), was a famous Arab Muslim historian, historiographer, demographer, economist, philosopher and sociologist born in present-day Tunisia. ... Joseph Schumpeter Joseph Alois Schumpeter (February 8, 1883 – January 8, 1950) was an economist from Austria and an influential political scientist. ... Scholastic redirects here. ... Natural law or the law of nature (Latin: lex naturalis) is an ethical theory that posits the existence of a law whose content is set by nature and that therefore has validity everywhere. ...


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. Mercantilism was an economic doctrine that flourished from the 16th to 18th century in a prolific pamphlet literature, whether of merchants or statesmen. 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 then 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.[54][55] 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 of tariffs and other restrictions on the movement of labour, goods and capital. ... Capitalism originated from Western Europe. ... Mercantile redirects here. ...


Physiocrats, a group of 18th century French thinkers and writers, developed the idea of the economy as a circular flow of income and output. 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. Pysiocrats opposed the mercantilist policy of promoting manufacturing and trade at the expense of agriculture, including import tariffs and high taxes on land, because they believed that only agricultural production generated a clear surplus over cost. Thus, agriculture was the basis of all wealth. As a reaction against copious mercantilist trade regulations, the physiocrats advocated a policy of laissez-faire, which called for minimal government intervention the economy.[56][57] The Physiocrats were a group of economists who believed that the wealth of nations was derived solely from agriculture. ... A very simple circular flow diagram. ... Laissez-faire is short for laissez faire, laissez passer, a French phrase meaning to let things alone, let them pass. First used by the eighteenth century Physiocrats as an injunction against government interference with trade, it is now used as a synonym for strict free market economics. ...


Classical economics

Main article: 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."[58] Classical economics is widely regarded as the first modern school of economic thought. ... For other persons named Adam Smith, see Adam Smith (disambiguation). ... Adam Smith An Inquiry into the Nature and Causes of the Wealth of Nations is the magnum opus of the Scottish economist Adam Smith, published on March 9, 1776 during the Scottish Enlightenment. ...


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 general approach that Smith helped initiate was called political economy and later classical economics. It included such notables as Thomas Malthus, David Ricardo, and John Stuart Mill writing from about 1770 to 1870. [59] For other uses, see Invisible hand (disambiguation). ... Look up paradox in Wiktionary, the free dictionary. ... The Politics series Politics Portal This box:      Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. ... Classical economics is widely regarded as the first modern school of economic thought. ... Thomas Robert Malthus, FRS (13th February, 1766 – 29th December, 1834), was an English demographer and political economist. ... David Ricardo (18 April 1772–11 September 1823), a political economist, is often credited with systematizing economics, and was one of the most influential of the classical economists, along with Thomas Malthus and Adam Smith. ... John Stuart Mill (20 May 1806 – 8 May 1873), British philosopher, political economist, civil servant and Member of Parliament, was an influential liberal thinker of the 19th century. ...


While Adam Smith emphasized the production of income, David Ricardo focused on the distribution of income among landowners, workers, and capitalists. Ricardo saw a 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. 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.[60] Other classical economists presented variations on Smith, termed the 'labour theory of value'. Classical economics focused on the tendency of markets to move to long-run equilibrium. The labor theory of value (LTV) is a theory in economics and political economy concerning a market-oriented society: the theory equates the value of an exchangeable good or service (i. ...


Marxist economics

Main article: Marxian economics
The Marxist school of economic thought comes from the work of German economist Karl Marx.
The Marxist school of economic thought comes from the work of German economist Karl Marx.

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. 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,[61][62] although concealed by appearances of "vulgar" political economy.[63][64] Note: Marxian is not restricted to Marxian economics, as it includes those inspired by Marxs works who do not identify with Marxism as a political ideology. ... Image File history File links Karl_Marx_001. ... Image File history File links Karl_Marx_001. ... Karl Heinrich Marx (May 5, 1818 – March 14, 1883) was a 19th century philosopher, political economist, and revolutionary. ... The labor theory of value (LTV) is a theory in economics and political economy concerning a market-oriented society: the theory equates the value of an exchangeable good or service (i. ...


Neoclassical economics

A body of theory later termed 'neoclassical economics' or 'marginalist economics' formed from about 1870 to 1910. The term 'economics' was popularized by neoclassical economists such as Alfred Marshall as a substitute for the earlier term 'political economy'. 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. 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.[65] Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ... Marginalism is the use of marginal concepts within economics. ... Alfred Marshall Alfred Marshall (July 26, 1842–July 13, 1924), born in Bermondsey, London, England, became one of the most influential economists of his time. ... The Politics series Politics Portal This box:      Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. ... The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). ... The labor theory of value (LTV) is a theory in economics and political economy concerning a market-oriented society: the theory equates the value of an exchangeable good or service (i. ... “Marginal revolution” redirects here. ...


In microeconomics, neoclassical economics represents incentives and costs as playing a pervasive role in shaping decision making. An immediate example of this is the consumer theory of individual demand, which isolates how prices (as costs) and income affect quantity demanded. In macroeconomics it is reflected in an early and lasting neoclassical synthesis with Keynesian macroeconomics.[66][67] Microeconomics (or price theory) is a branch of economics that studies how individuals, households, and firms make decisions to allocate limited resources,[1] typically in markets where goods or services are being bought and sold. ... Decision making is the cognitive process of selecting a course of action from among multiple alternatives. ... Consumer theory is a theory of economics. ... Circulation in macroeconomics Macroeconomics is a branch of Economics that deals with the performance, structure, and behavior of the economy as a whole. ... Neoclassical synthesis refers to a postwar academic movement in economics which attempted to absorb the economic thought of John Maynard Keynes into the orthodox thought of the neoclassical economists. ...


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 the term used to distinguish the economics profession in general from advocates of various heterodox schools, including Austrian economics and Marxian economics. ... 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 often used in the context of economics. ... Market failure is a term used by economists to describe the condition where the allocation of goods and services by a 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 refers to a general approach in economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand. ... World GDP/capita changed very little for most of human history before the industrial revolution. ... Measures of national income and output are used in economics to estimate the value of goods and services produced in an economy. ...


Keynesian economics

John Maynard Keynes (above, right), widely considered a towering figure in 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.[68][69] 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. Such terms as "revolutionary" have been applied to the book in its impact on economic analysis.[70][71][72] Keynesian economics (pronounced kainzian, IPA ), also called Keynesianism, or Keynesian Theory, is an economic theory based on the ideas of the 20th-century British economist John Maynard Keynes. ... Post-Keynesian economics is a school of thought which is based on the ideas of John Maynard Keynes. ... Download high resolution version (500x630, 95 KB) This work is copyrighted. ... Download high resolution version (500x630, 95 KB) This work is copyrighted. ... John Maynard Keynes, 1st Baron Keynes, CB (pronounced cains, IPA ) (5 June 1883 – 21 April 1946) was a British economist whose ideas, called Keynesian economics, had a major impact on modern economic and political theory as well as on many governments fiscal policies. ... The General Theory of Employment Interest and Money is generally considered to be the masterwork of the English economist John Maynard Keynes. ... Circulation in macroeconomics Macroeconomics is a branch of Economics that deals with the performance, structure, and behavior of the economy as a whole. ... Effective demand (in macroeconomics often seen as synonymous with aggregate demand), refers to the very simple economic idea that says that its not enough to want something such as food or luxuries. ...


Keynesian economics has two successors. Post-Keynesian economics also concentrates on macroeconomic rigidities and adjustment processes. 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.[73] New-Keynesian economics is also associated with developments in the Keynesian fashion. 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. Post-Keynesian economics is a school of thought which is based on the ideas of John Maynard Keynes. ... The University of Cambridge (often Cambridge University), located in Cambridge, England, is the second-oldest university in the English-speaking world and has a reputation as one of the worlds most prestigious universities. ... Joan Violet Robinson (1903 in Surrey - 1983) was a Keynesian economist who was well known for her knowledge of monetary economics and wide-ranging contributions to economic theory. ... New Keynesian economics developed partly in response to new classical economics. ...


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 school of economic thought that advocates adherence to strict methodological individualism. ... The Chicago School of Economics is a school of thought in economics; it refers to the style of economics practiced at and disseminated from the University of Chicago after 1946. ... The Freiburg School is a school of economic thought founded in the early years of Nazi Germany 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 Vilfredo Pareto. ... 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. New alternative developments include evolutionary economics, dependency theory, and world systems theory. Classical economics is widely regarded as the first modern school of economic thought. ... Keynesian economics (pronounced kainzian, IPA ), also called Keynesianism, or Keynesian Theory, is an economic theory based on the ideas of the 20th-century British economist John Maynard Keynes. ... Post-Keynesian economics is a school of thought which is based on the ideas of John Maynard Keynes. ... Monetarism is a set of views concerning the determination of national income and monetary economics. ... New Classical Economics emerged as a school in Macroeconomics during the 1970s. ... Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively managed using incentives for people to produce (supply) goods and services, such as adjusting income tax and capital gains tax rates. ... Evolutionary economics is a relatively new economic methodology that is modeled on biology. ... Main International Relations Theories Politics Portal This box:      Dependency theory is a body of social science theories, both from developed and developing nations, that create a worldview which suggests that poor underdeveloped states of the periphery are exploited by wealthy developed nations of the centre, in order to sustain economic... Unlike former sociological theories, which presented general models of social change with particular focus at the societal level, world-systems theory (or world system perspective) explores the role and relationships between societies (and the subsequent changes produced by them). ...


Historic definitions of economics

This section extends the discussion of the definitions of Economics at the beginning of the article.


Wealth definition

Some early definitions of political economy were succinctly related to wealth, which was broadly construed. Adam Smith defined the subject as simply the "Science of wealth."[74] Smith offered another definition, "the Science relating to the laws of production, distribution and exchange."[74] Wealth was defined as the specialization of labour which allowed a nation to produce more with its supply of labour and resources. This definition divided Smith and Hume from previous definitions which defined wealth as gold. Hume argued that gold without increased activity only serves to raise prices.[75] In economics wealth of a person or nation is the value of assets owned minus the value of liabilities owed (to foreigners in the case of a nation) at a point in time. ... For other persons named Adam Smith, see Adam Smith (disambiguation). ...


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. For Mill, wealth is defined as the stock of useful things.[76] John Stuart Mill (20 May 1806 – 8 May 1873), British philosopher, political economist, civil servant and Member of Parliament, was an influential liberal thinker of the 19th century. ... Concise Oxford English Dictionary (until 2002 officially entitled The Concise Oxford Dictionary, and widely known by the abbrevation COD) is probably the best-known of the smaller Oxford dictionaries. ...


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"[77] and a "bastard science."[78] Upper: Steel-plate engraving of Ruskin as a young man, made circa 1845, scanned from print made circa 1895. ...


Welfare definition

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."[79] Alfred Marshall Alfred Marshall (July 26, 1842–July 13, 1924), born in Bermondsey, London, England, became one of the most influential economists of his time. ...


Economic theory criticisms

Is economics a science?

One of the marks of a science is the use of a scientific method and the ability to establish hypotheses and make predictions which can then be tested with data and where the results are repeatable and demonstrable to others when the same conditions are present. In a number of applied fields in economics experimentation has been conducted: this includes the sub-fields of experimental economics and consumer behavior, focused on experimentation using human subjects; and the sub-field of econometrics, focused on testing hypotheses when data are not generated via controlled experimentation. However, in a way similar to what happens in other social sciences, it may be difficult for economists to conduct certain formal experiments due to moral and practical issues involved with human subjects. Part of a scientific laboratory at the University of Cologne. ... Scientific method is a body of techniques for investigating phenomena, acquiring new knowledge, or correcting and integrating previous knowledge. ... A hypothesis (= assumption in ancient Greek) is a proposed explanation for a phenomenon. ... Prediction of future events is an ancient human wish. ... Experimental economics is the use of experimental methods to evaluate theoretical predictions of economic behaviour. ... Consumer behaviour is the study of how people buy, what they buy, when they buy and why they buy. ... Econometrics is concerned with the tasks of developing and applying quantitative or statistical methods to the study and elucidation of economic principles. ... The social sciences are a group of academic disciplines that study human aspects of the world. ...


The status of the social sciences as an empirical science or even a science, has been a matter of debate since the 20th century. Some philosophers and scientists, most notably Karl Popper, have asserted that no empirical hypothesis, proposition, or theory can be considered scientific if no observation could be made which might contradict it, insisting on strict falsifiability, see Positivism dispute.[80] Critics allege that economics cannot always achieve Popperian falsifiability, but economists point to many examples of controlled experiments that do exactly this, albeit in laboratory settings.[81][82][83] Empiricism (greek εμπειρισμός, from empirical, latin experientia - the experience), is the philosophical doctrine that all human knowledge comes at first from senses and experience. ... Part of a scientific laboratory at the University of Cologne. ... Sir Karl Raimund Popper, CH, FRS, FBA, (July 28, 1902 – September 17, 1994), was an Austrian and British[1] philosopher and a professor at the London School of Economics. ... Falsifiability (or refutability or testability) is the logical possibility that an assertion can be shown false by an observation or a physical experiment. ... Positivismusstreit is the German word for debate about positivism and labels a well known scientific dispute between Karl Popper and Theodor W. Adorno in 1961. ...


While economics has produced theories that correlate with observations of behavior in society, economics yields no natural laws or universal constants due to its reliance on non-physical arguments. This has led some critics to argue economics is not a science.[84][85] In general, economists reply that while this aspect may present serious difficulties, they do in fact test their hypotheses using statistical methods such as econometrics and data generated in the real world.[86] The field of experimental economics has seen efforts to test at least some predictions of economic theories in a simulated laboratory setting – an endeavor which earned Vernon Smith and Daniel Kahneman the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel in 2002. A graph of a bell curve in a normal distribution showing statistics used in educational assessment, comparing various grading methods. ... Econometrics is concerned with the tasks of developing and applying quantitative or statistical methods to the study and elucidation of economic principles. ... Experimental economics is the use of experimental methods to evaluate theoretical predictions of economic behaviour. ... Vernon L. Smith is professor of economics and law at George Mason University, a research scholar in the Interdisciplinary Center for Economic Science, and a Fellow of the Mercatus Center all in Arlington, Virginia. ... Daniel Kahneman Daniel Kahneman (born March 5, 1934 in Tel Aviv, in the then British Mandate of Palestine, now in Israel), is a key pioneer and theorist of behavioral finance, which integrates economics and cognitive science to explain seemingly irrational risk management behavior in human beings. ... The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, commonly called the Nobel Prize in Economics, is a prize awarded each year for outstanding intellectual contributions in the field of economics. ... Also see: 2002 (number). ...


Although the conventional way of connecting an economic model with the world is through econometric analysis, economist and professor Deirdre McCloskey, through what is known as the McCloskey critique, cites many examples in which professors of econometrics were able to use the same data to both prove and disprove the applicability of a model's conclusions. She argues the vast efforts expended by economists on analytical equations is essentially wasted effort. Econometricians have replied that this would be an objection to any science, and not only to economics. Critics of McCloskey's critique reply by saying, among other things, that she ignores examples where economic analysis is conclusive and that her claims are illogical. [87] A diagram of the IS/LM model In economics, a model is a theoretical construct that represents economic processes by a set of variables and a set of logical and quantitative relationships between them. ... Econometrics literally means economic measurement. It is the branch of economics that applies statistical methods to the empirical study of economic theories and relationships. ... Deirdre N. McCloskey (Born Donald N. McCloskey) (1942 - ) is an American economist and professor. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... Econometrics is concerned with the tasks of developing and applying quantitative or statistical methods to the study and elucidation of economic principles. ... Econometrics literally means economic measurement. It is the branch of economics that applies statistical methods to the empirical study of economic theories and relationships. ...


Nobel Prize laureate and philosopher Friedrich Hayek thought that economics is a social science, but argued that the propensity to imitate the procedures of physical sciences in economics leads to outright error and is decidedly unscientific since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed. [88] Friedrich August von Hayek, CH (May 8, 1899 in Vienna – March 23, 1992 in Freiburg) was an Austrian-born British economist and political philosopher known for his defense of liberal democracy and free-market capitalism against socialist and collectivist thought in the mid-20th century. ...


Economics has been jokingly called "The dismal science". [85] Although the actual origin of this 19th century designation is disputed, it managed to become a derogatory alternative name for economics. The dismal science is a derogatory alternative name for economics devised by the Victorian historian Thomas Carlyle. ...


Criticism of assumptions

Certain models used by economists within economics have been criticized, sometimes by other economists, for their reliance on unrealistic, unobservable, or unverifiable assumptions. One response to this criticism has been that the unrealistic assumptions result from abstraction from unimportant details, and that such abstraction is necessary in a complex real world, which means that rather than unrealistic assumptions compromising the epistemic worth of economics, such assumptions are essential for economic knowledge. One study has termed this explanation the "abstractionist defense" and concluded that that this "abstractionist defense" does not invalidate the criticism of the unrealistic assumptions.[89] However, it is important to note that while one school does have a majority in the field, there is far from a consensus on all economic issues and multiple alternative fields claim to have more empirically-justified insights.


Assumptions and observations

Many criticisms of economics revolve around the belief that the fundamental claims of economics are unquestioned assumption without empirical evidence. Many economists reply giving examples of concepts that used to be considered "axioms" in economics and which have turned out to be consistent with empirical observation (see three examples below), however agreeing that these observations reveal that the original assumption was probably oversimplified.


A few examples of such concepts that according to many economists have evolved from "assumptions" to empirically-based are:

  • Rationality = Self-Interest: This refers to the common axiom or belief shared by many mainstream economists that rationality implies self-interest and vice-versa. This does not, however, preclude altruism. Altruism can be viewed as a case in which the individual's self-interest includes doing good for others. Other views claim that this does not leave much room for altruism, and in fact discourages it, rather like a global prisoner's dilemma .i.e.: If "rational" people are not altruistic, then I shouldn't be altruistic either, ad infinitum. However, this "axiom" has since been subjected to multiple experiments and even altruism, when all social pressures are considered, could be modeled as a form of self-interest.[90][91]
  • Well-Being = Consumption: This refers to the axiom or belief shared by some mainstream economists that human beings are happy when they consume, and unhappy when not consuming. Added to the other common assumption of insatiability, this implies human beings can never remain happy. Although this original belief is over-simplified (and perhaps not representative of most economists actual beliefs today), empirical observations have now confirmed a relationship between sense of well-being and such factors as income.[92]
  • Atomism: This refers to the belief shared by some mainstream economists that human beings are atomistic, ie.their preferences are independent. This is another simplification both of the economy and of the specific beliefs of the economists. Agent-based modeling and experimental economics produce results that are indicative of this theory.

A common defense of the above axioms was that they made the problem tractable. However, after specific details of this have been observed through economics research in a variety of controlled experiments, the original assumptions have been further refined and are no longer technically "axioms" in mainstream economics. Will the two prisoners cooperate to minimize total loss of liberty or will one of them, trusting the other to cooperate, betray him so as to go free? In game theory, the prisoners dilemma (sometimes abbreviated PD) is a type of non-zero-sum game in which two players... Mainstream economics is the term used to distinguish the economics profession in general from advocates of various heterodox schools, including Austrian economics and Marxian economics. ...


Criticism of contradictions

Economics is a field of study with various schools and currents of thought. As a result, there exists a considerable distribution of opinions, approaches and theories. Some of these reach opposite conclusions or, due to the differences in underlying assumptions, contradict each other.[93][94][95] It has been suggested that this article or section be merged into History of economics. ...


Criticisms of welfare and scarcity definitions of economics

The definition of economics in terms of material being is criticized as too narrowly materialistic. It ignores, for example, the non-material aspects of the services of a doctor or a dancer. A theory of wages which ignored all those sums paid for immaterial services was incomplete. 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). 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. Marginal Value is a concept widely used in Economics. ... A good in economics is any physical object (natural or man-made) or service that, upon consumption, increases utility, and therefore can be sold at a price in a market. ...


Marxist economics still focuses on a welfare definition. 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. Marxism is the political practice and social theory based on the works of Karl Marx, a 19th century philosopher, economist, journalist, and revolutionary, along with Friedrich Engels. ...


The definition of economics in terms of scarcity suggests that resources are in finite supply while wants and needs are infinite. People therefore have to make choices. Scarcity too has its critics. It is most amenable to those who consider economics a pure science, but others object that it reduces economics merely to a valuation theory. It ignores how values are fixed, prices are determined and national income is generated.[citation needed] It also ignores unemployment and other problems arising due to abundance. This definition cannot apply to such Keynesian concerns as cyclical instability, full employment, and economic growth. In economics, scarcity is defined as a condition of limited resources, where society does not have sufficient resources to produce enough to fulfill subjective wants. ... John Maynard Keynes, 1st Baron Keynes, CB (pronounced cains, IPA ) (5 June 1883 – 21 April 1946) was a British economist whose ideas, called Keynesian economics, had a major impact on modern economic and political theory as well as on many governments fiscal policies. ... In economics, full employment has more than one meaning. ... World GDP/capita changed very little for most of human history before the industrial revolution. ...


The focus on scarcity continues to dominate neoclassical economics, which, in turn, predominates in most academic economics departments. It has been criticized in recent years from a variety of quarters, including institutional economics and evolutionary economics and surplus economics. Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ... Institutional economics focuses on understanding the role of human-made institutions in shaping economic behavior. ... Evolutionary economics is a relatively new economic methodology that is modeled on biology. ... It has been suggested that this article or section be merged into Economic surplus. ...


Criticism in other topics

Criticism on several topics in economics can be found elsewhere, in both general and specialized literature. See, for example: general equilibrium, Pareto efficiency, marginalism, behavioral finance, behavioral economics, feminist economics, Keynesian economics, monetarism, neoclassical economics, endogenous growth theory, exogenous growth model, comparative advantage, Kuznets curve, Laffer curve, economic sociology, agent-based computational economics, Homo economicus, rational choice theory, rational egoism, public choice theory, Heckscher-Ohlin model, Harrod-Domar model, quantity theory of money, et al.. General Equilibrium (linear) supply and demand curves. ... Pareto efficiency, or Pareto optimality, is an important notion in neoclassical economics with broad applications in game theory, engineering and the social sciences. ... Marginalism is the use of marginal concepts within economics. ... Nobel Prize in Economics winner Daniel Kahneman, was an important figure in the development of behavioral finance and economics and continues to write extensively in the field. ... Nobel Prize in Economics winner Daniel Kahneman, was an important figure in the development of behavioral finance and economics and continues to write extensively in the field. ... Feminist economics broadly refers to a developing branch of economics that applies feminist insights and critiques to mainstream economics. ... Keynesian economics (pronounced kainzian, IPA ), also called Keynesianism, or Keynesian Theory, is an economic theory based on the ideas of the 20th-century British economist John Maynard Keynes. ... Monetarism is a set of views concerning the determination of national income and monetary economics. ... Neoclassical economics refers to a general approach (a metatheory) to economics based on supply and demand which depends on individuals (or any economic agent) operating rationally, each seeking to maximize their individual utility or profit by making choices based on available information. ... In economics, endogenous growth theory or new growth theory was developed in the 1980s as a response to criticism of the neo-classical growth model. ... 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 model of long-run economic growth within the framework of neoclassical economics. ... In economics, David Ricardo is credited for the principle of comparative advantage to explain how it can be beneficial for two parties (countries, regions, individuals and so on) to trade if one has a lower relative cost of producing some good. ... Kuznets curve is the graphical representation of Simon Kuznetss theory (Kuznets hypothesis) that economic inequality increases over time, then at a critical point begins to decrease. ... This article does not cite any references or sources. ... Economic sociology may be defined as the sociological analysis of economic phenomena. ... Agent-based computational economics (ACE) is the computational study of economic processes modeled as dynamic systems of interacting agents. ... Homo economicus, or Economic man, is the concept in some economic theories of man (that is, a human) as a rational and self-interested actor who desires wealth, avoids unnecessary labor, and has the ability to make judgments towards those ends. ... Rational choice theory assumes human behavior is guided by instrumental reason. ... Rational egoism is the philosophical view that it is always in accordance with reason to pursue ones own interests. ... Public choice theory is a branch of economics that studies the decision-making behavior of voters, politicians and government officials from the perspective of economic theory, namely game theory and decision theory. ... The Heckscher-Ohlin model (H-O model) is a general equilibrium mathematical model of international trade, developed by Eli Heckscher and Bertil Ohlin at the Stockholm School of Economics. ... The Harrod-Domar model is used in development economics to explain an economys growth rate in terms of the level of saving and productivity of capital. ... In economics, the velocity of money refers to a key term in the quantity theory of money, which centers on the equation of exchange: where is the total amount of money in circulation in an economy at any one time (say, on average during a month). ... This page includes English translations of several Latin phrases and abbreviations such as . ...


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. 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.[96] John Stuart Mill (20 May 1806 – 8 May 1873), British philosopher, political economist, civil servant and Member of Parliament, was an influential liberal thinker of the 19th century. ... Marie-Ésprit-Léon Walras (December 16, 1834 in Évreux, France - January 5, 1910 in Clarens, near Montreux, Switzerland) was a French economist, considered by Joseph Schumpeter as the greatest of all economists. He was a mathematical economist associated with the creation of the general equilibrium theory. ...


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.[97] The close relation of economic theory and practice with politics[98] 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.[99] The Politics series Politics Portal This box:      A politician is an individual who is a formally recognized and active member of a government, or a person who influences the way a society is governed through an understanding of political power and group dynamics. ... Rhetoric (from Greek , rhêtôr, orator, teacher) is generally understood to be the art or technique of persuasion through the use of oral, visual, or written language; however, this definition of rhetoric has expanded greatly since rhetoric emerged as a field of study in universities. ... Look up Agenda in Wiktionary, the free dictionary. ... A value system is in essence the ordering and prioritization of the ethical and ideological values that an individual or society holds. ... For other uses, see Politics (disambiguation). ...


Issues like central bank independence, central bank policies and rethoric in central bank governors discourse or the premises of macroeconomic policies[100] (monetary and fiscal policy) of the States, are focus of contention and criticism.[101][102][103][104] Circulation in macroeconomics Macroeconomics is a branch of Economics that deals with the performance, structure, and behavior of the economy as a whole. ... It has been suggested that monetary theory be merged into this article or section. ... Fiscal policy is the economic term that defines the set of principles and decisions of a government in setting the level of public expenditure and how that expenditure is funded. ... For other uses, see State (disambiguation). ...


Ideologies and economics

For example, it is possible 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. communism, as issues of economics. 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. Karl Heinrich Marx (May 5, 1818 – March 14, 1883) was a 19th century philosopher, political economist, and revolutionary. ... For other uses, see Cold War (disambiguation). ... For other uses, see Capitalism (disambiguation). ... Communism is an ideology that seeks to establish a classless, stateless social organization based on common ownership of the means of production. ...


Ethics and economics

The relationship between economics and ethics is complex. 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. For other uses, see Ethics (disambiguation). ...


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. (See, for example, consumerism and Buy Nothing Day.) According to some thinkers, a theory of economics is also, or implies also, a theory of moral reasoning.[105] For other uses, see Capitalism (disambiguation). ... Consumerist redirects here. ... Buy Nothing Day demonstration, San Francisco, November 2000 Buy Nothing Day is an informal day of protest against consumerism observed by social activists. ... Moral reasoning is a study in psychology that overlaps with moral philosophy. ...


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 things 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.[106] 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". 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. 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. They argue that redistribution of wealth is morally and economically wrong. Socialists view it as a failure of economics to respect society. 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. In microeconomics, the main criteria by which one can distinguish between different market forms are: the number and size of producers and consumers in the market, the type of goods and services being traded, and the degree to which information can flow freely. ... Conditioning is a psychological term for what Ivan Pavlov described as the learning of conditional behavior. ... The well-being or quality of life of a population is an important concern in economics and political science. ... This article deals with the libertarianism as defined in America and several other nations. ... Socialism is any economic system in which the means of production are owned and controlled collectively or a political philosophy advocating such a system. ... Construction workers generally work long hours for their pay Labor economics seeks to understand the functioning of the market and dynamics for labor. ... Welfare economics is a branch of economics that uses microeconomic techniques to simultaneously determine the allocational efficiency of a macroeconomy and the income distribution associated with it. ... Human development theory is an economic theory that merges older ideas from ecological economics, sustainable development, welfare economics, and feminist economics. ...


The older term for economics, political economy, is still often used instead of "economics", especially by certain economists such as Marxists. 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. Some mainstream universities (many in the United Kingdom) have a "political economy" department rather than an "economics" department. The Politics series Politics Portal This box:      Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. ... Marxism is the political practice and social theory based on the works of Karl Marx, a 19th century philosopher, economist, journalist, and revolutionary, along with Friedrich Engels. ... In philosophy, normative is usually contrasted with positive, descriptive or explanatory when describing types of theories, beliefs, or statements. ... In common usage positive is sometimes used in affirmation, as a synonym for yes or to express certainty. Look up Positive on Wiktionary, the free dictionary In mathematics, a number is called positive if it is bigger than zero. ...


Marxist economics generally denies the trade-off of time for money. In the Marxist view, concentrated control over the means of production is the basis for the allocation of resources among classes. Scarcity of any particular physical resource is subsidiary to the central question of power relationships embedded in the means of production.


Economics in practice

Main article: Economist

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."[107] 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. 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. In the private sector, professional economists are employed in industries such as banking and finance. Economists also work for various government departments and agencies, for example, the Treasury. Alan Greenspan, former chairman, United States Federal Reserve. ... A university is an institution of higher education and of research, which grants academic degrees. ... A degree is any of a wide range of awards made by institutions of higher education, such as universities, normally as the result of successfully completing a program of study. ... In the history of education, the seven liberal arts comprise two groups of studies, the trivium and the quadrivium. ... The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel (in Swedish Sveriges Riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is a prize awarded each year for outstanding intellectual contributions in the field of economics. ... For other uses, see Bank (disambiguation). ... Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. ... The term treasury was first used in classical times to describe the votive buildings erected to house gifts to the gods, such as the Siphnian Treasury in Delphi or the many buildings put up in Olympia, Greece by competing city-states, to impress each other during the Ancient Olympic Games. ...


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Image File history File links Portal. ... Advert redirects here. ... The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel (in Swedish Sveriges Riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is a prize awarded each year for outstanding intellectual contributions in the field of economics. ... Barter is a type of trade in which goods or services are exchanged for other goods and/or services; no money is involved in the transaction. ... Computational economics is a form of economics which relies on mathematical methods, including mathematical economics and econometrics. ... A debt-based monetary system is an economic system where money is created primarily through fractional reserve banking techniques, using the private banking system. ... The dismal science is another, often derogatory, name for economics devised by the Victorian historian Thomas Carlyle. ... The European Association for Evolutionary Political Economy (EAEPE) is a pluralist forum of social scientists that brings together the theorists and theoretical traditions to develop a more realistic and adequate approach to theory and policy. ... Variations in CO2, temperature and dust from the Vostok ice core over the last 450,000 years For current global climate change, see Global warming. ... The terms First World, Second World, and Third World were used to divide the nations of Earth into three broad categories. ... A map of countries often considered to have made up the Second World from the 1950s through to the 1980s. ... For the Jamaican reggae band, see Third World (band). ... Fourth World may mean: Fourth World, a term most commonly used to collectively describe notably marginalised or oppressed groups, in particular indigenous peoples, living in Third or First World countries. ... Foreign aid, international aid or development assistance is when one country helps another country through some form of donation. ... Economic calendar is a type of calendar that is intended to inform financiers and traders about the scheduled major economic numbers (like CPI, PMI, Jobless Claims), government reports and speeches of the most influential persons of the financial world. ... In economics, a depression is a term commonly used for a sustained downturn in the economy. ... Economic development is the development of economic wealth of countries or regions for the well-being of their inhabitants. ... Wikipedia does not yet have an article with this exact name. ... A recession is usually defined in macroeconomics as a fall of a countrys Gross National Product in two successive quarters. ... Economic sanctions are economic penalties applied by one country (or group of countries) on another for a variety of reasons. ... Economic sociology may be defined as 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 that addresses the dynamic and spatial interdependence between human economies and natural ecosystems. ... Feminist economics broadly refers to a developing branch of economics that applies feminist insights and critiques to mainstream economics. ... Alan Greenspan, former chairman, United States Federal Reserve. ... The world economy can be represented various ways, and broken down in various ways. ... Gross National Happiness (GNH) is an attempt to define a standard of living in more holistic and psychological terms than Gross National Product. ... This article is about GDP in the context of economics. ... Measures of national income and output are used in economics to estimate the value of goods and services produced in an economy. ... There are very few or no other articles that link to this one. ... For the magazine, see Marketing (magazine). ... It has been suggested that monetary theory be merged into this article or section. ... For other uses, see Money (disambiguation). ... In macroeconomics, money supply (monetary aggregates, money stock) is the quantity of currency and money in bank accounts in the hands of the non-bank public available within the economy to purchase goods, services, and securities. ... An oligopoly is a market form in which a market 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. ... Look up supply in Wiktionary, the free dictionary. ... It has been suggested that Commerce be merged into this article or section. ... Balance of trade figures are the sum of the money gained by a given economy by selling exports, minus the cost of buying imports. ... Balance of trade figures are the sum of the money gained by a given economy by selling exports, minus the cost of buying imports. ... The United States dollar is the official currency of the United States. ... For the business meaning, see Wealth (economics). ... The World Bank logo The World Bank (the Bank) is a part of the World Bank Group (WBG), is a bank that makes loans to developing countries for development programs with the stated goal of reducing poverty. ... 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. ... Economics, is the social science that studies the production, distribution, and consumption of resources. ... Following is a list of accounting topics. ... 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. ... This article presents possible categorizations of economic systems. ... This is an alphabetical list of notable economists. ... Topics in finance include: // Finance an overview Arbitrage Capital (economics) Capital asset pricing model Cash flow Cash flow matching Debt Default Consumer debt Debt consolidation Debt settlement Credit counseling Bankruptcy Debt diet Debt-snowball method Discounted cash flow Financial capital Funding Financial modeling Entrepreneur Entrepreneurship Fixed income analysis Gap financing... Organizational studies - an overview Organizational development Management development Mentoring Coaching Job rotation Professional development Upward feedback Executive education Supervisory training leadership development leadership talent identification and management individual development planning 360 degree feedback succession planning Skills management performance improvement process improvement job enrichment Training & Development managing change and also change... Management information systems an overview E-business Intranet strategies Database management system Data warehousing Data mining Document warehousing Customer relationship management (CRM) Sales force management system Enterprise resource planning (ERP) Human Resource Management Systems (HRMS) Business performance management Project management software Integration management Middleware Groupware and collaborative systems RSA Computer... International trade - an overview Absolute advantage Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) APEC Autarky Balance of trade barter Bilateral Investment Treaty (BIT) Bimetallism branch plant Bretton Woods Conference Bretton Woods system British timber trade Cash crop Comparative advantage Continental trading bloc Cost, insurance and freight Currency... This is a list of articles on general management and strategic management topics. ... This is a list of over 200 articles on marketing topics. ... Manufacturing and manufacturing systems manufacturing factory Craft system English system of manufacturing American system of manufacturing Mass production Batch production Just in time manufacturing Toyota Production System Lean manufacturing Computer-aided manufacturing (CAM) Mass customization Theories of production Taylorism Fordism Theory of constraints Productivity Productivity benchmarking cost accounting experience curve... This is a list of important publications in economics, organized by field. ... The following list of scholarly journals in economics is not comprehensive, as there are hundreds currently published. ...

Notes

  1. ^ Harper, Douglas (November 2001). Online Etymology Dictionary - Economy (HTML). Retrieved on October 27, 2007.
  2. ^ Robbins, Lionel (1945). An Essay on the Nature and Significance of Economic Science. London: Macmillan and Co., Limited. 
  3. ^ Friedman, David D. (2002). "Crime," The Concise Encyclopedia of Economics. Accessed October 21, 2007. ]
  4. ^ The World Bank (2007). "Economics of Education." Accessed October 21, 2007.
  5. ^ Iannaccone, Laurence R. (1998). "Introduction to the Economics of Religion," Journal of Economic Literature, 36(3), pp. 1465-1495. Accessed October 21, 2007.
  6. ^ Nordhaus, William D. (2002). “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.
  7. ^ Steven Pressman. Fifty Major Economists. (1999). Routledge. ISBN 0415134811 p.20
  8. ^ Blaug, Mark (2007). "The Social Sciences: Economics," Microeconomics, The New Encyclopædia Britannica, v. 27, pp. 347-49. Chicago. ISBN 0852294239
  9. ^ Varian, Hal R. (1987). "microeconomics," The New Palgrave: A Dictionary of Economics, v. 3, pp. 461-63. London and New York: Macmillan and Stockton. ISBN 0-333-37235-2
  10. ^ Ng, Yew-Kwang (1992). "Business Confidence and Depression Prevention: A Mesoeconomic Perspective," American Economic Review 82(2), pp. 365-371. [1]
  11. ^ Howitt, Peter M. (1987). "macroeconomics: relations with microeconomics". The New Palgrave: A Dictionary of Economics, pp. 273-76. London and New York: Macmillan and Stockton. ISBN 0-333-37235-2. 
  12. ^ Blaug, Mark (2007). "The Social Sciences: Economics," Macroeconomics, The New Encyclopædia Britannica, v. 27, p. 349.
  13. ^ Blanchard, Olivier Jean (1987). "neoclassical synthesis," The New Palgrave: A Dictionary of Economics, v. 3, pp. 634-36.
  14. ^ Davis, John B. (2006). "Heterodox Economics, the Fragmentation of the Mainstream, and Embedded Individual Analysis,” in Future Directions in Heterodox Economics. Ann Arbor: University of Michigan Press.
  15. ^ (1987) The New Palgrave: A Dictionary of Economics, v. 4, pp. 980-88. London and New York: Macmillan and Stockton. ISBN 0-333-37235-2 and ISBN 0-935859-10-1. 
  16. ^ Debreu, Gerard (1987). "mathematical economics," The New Palgrave: A Dictionary of Economics, v. 3, pp. 401-03.
  17. ^ Hashem, M. Pesaren (1987). "econometrics", The New Palgrave: A Dictionary of Economics, v. 2, p. 8.
  18. ^ Usher, D. (1987), "real income," The New Palgrave: A Dictionary of Economics, v. 4, p. 104.
  19. ^ Sen, Amartya (1979), "The Welfare Basis of Real Income Comparisons: A Survey," Journal of Economic Literature, 17(1), pp. 1-45.
  20. ^ Ruggles, Nancy D. (1987), "social accounting". The New Palgrave: A Dictionary of Economicsdate=. London and New York: Macmillan and Stockton, v. 3, 377. ISBN 0-333-37235-2. 
  21. ^ Blaug, Mark (2007). "The Social Sciences: Economics," Growth and development, The New Encyclopædia Britannica, v. 27, p. 351. Chicago.
  22. ^ Samuelson, Paul A., and William D. Nordhaus (2004). Economics, ch. 27, "The Process of Economic Growth" McGraw-Hill. ISBN 0-07-287205-5.
  23. ^ Uzawa, H. (1987). "models of growth," The New Palgrave: A Dictionary of Economics, v. 3, pp. 483-89.
  24. ^ Bell, Clive (1987). "development economics," The New Palgrave: A Dictionary of Economics, v. 1, pp. 818-26.
  25. ^ Heilbroner, Robert L., and Peter J. Boettke (2007). "Economic Systems", The New Encyclopædia Britannica, v. 17, pp. 908-15.
  26. ^ NA (2007). "economic system," Encyclopædia Britannica online Concise Encyclopedia entry.
  27. ^ Kneese, Allen K., and Clifford S. Russell (1987). "environmental economics," The New Palgrave: A Dictionary of Economics, v. 2, pp. 159-64.
  28. ^ Samuelson, Paul A., and William D. Nordhaus (2004). Economics, ch. 18, "Protecting the Environment." McGraw-Hill.
  29. ^ Ross, Stephen A. (1987). "finance," The New Palgrave: A Dictionary of Economics, v. 2, pp. 322-26.
  30. ^ Aumann, R.J. (1987). "game theory ," The New Palgrave: A Dictionary of Economics, v. 2, pp. 460-82.
  31. ^ Schmalensee, Richard (1987). "industrial organization," The New Palgrave: A Dictionary of Economics, v. 2, pp. 803-808.
  32. ^ Freeman, R.B. (1987). "labour economics," The New Palgrave: A Dictionary of Economics, v. 3, pp. 72-76.
  33. ^ Friedman, David (1987). "law and economics," The New Palgrave: A Dictionary of Economics, v. 3, p. 144.
  34. ^ Posner, Richard A. (1972). Economic Analysis of Law. Aspen, 7th ed., 2007) ISBN 978-0-735-56354-4.
  35. ^ Coase, Ronald, "The Problem of Social Cost", The Journal of Law and Economics Vol.3, No.1 (1960). This issue was actually published in 1961.
  36. ^ NA (2007). "managerial economics". The New Encyclopaedia Britannica. Chicago: The New Encyclopaedia Britannica, v. 7, p. 757. ISBN 0852294239. 
  37. ^ Hughes, Alan (1987). "managerial capitalism". The New Palgrave: A Dictionary of Economics, v. 3, pp. 293-96.
  38. ^ Musgrave, R.A. (1987). "public finance," The New Palgrave: A Dictionary of Economics, v. 3, pp. 1055-60.
  39. ^ Feldman, Allan M. ((1987). "welfare economics," The New Palgrave: A Dictionary of Economics, v. 4, pp. 889-95.
  40. ^ Baumol, William J. (2007). "Economic Theory" (Measurement and ordinal utility). The New Encyclopædia Britannica, v. 17, p. 719.
  41. ^ Hicks, John Richard (1939). Value and Capital. London: Oxford University Press. 2nd ed., paper, 2001. ISBN 978-0198282693. 
  42. ^ Brody, A. (1987). ""prices and quantities," The New Palgrave: A Dictionary of Economics, v. 3, p. 957.
  43. ^ Jordan, J.S. (1982). "The Competitive Allocation Process Is Informationally Efficient Uniquely." Journal of Economic Theory, 28(1), p. 1-18.
  44. ^ Blaug, Mark (2007). "The Social Sciences: Economics". The New Encyclopædia Britannicav. 27, p. 347. Chicago. ISBN 0852294239
  45. ^ Laffont, J.J. (1987). "externalities,"," The New Palgrave: A Dictionary of Economics, v. 2, p. 263-65.
  46. ^ Samuelson, Paul A., and William D. Nordhaus (2004), Economics, pp.4-5, 7-15.
  47. ^ Montani, Guido (1987), "scarcity," The New Palgrave: A Dictionary of Economics, v. 4, p. 254.
  48. ^ This was first described by the Italian economist Enrico Barone in 1908. In 1939 the Soviet mathematician Leonid Kantorovich generalized and extended the analysis.
  49. ^ Milton Friedman (1953), "The Methodology of Positive Economics," Essays in Positive Economics, University of Chicago Press, pp. 10, 14-15.
  50. ^ Smith, Vernon L. (1987), "experimental methods in economics," The New Palgrave: A Dictionary of Economics, v. 2, pp. 241-42.
  51. ^ Samuelson, Paul (1947, 1983). Foundations of Economic Analysis, Enlarged Edition. Boston: Harvard University Press, p. 4. ISBN 978-0674313019. 
  52. ^ Lazear, Edward P. (2000). "Economic Imperialism," The Quarterly Journal of Economics, 115(1), pp. 99-146.
  53. ^ Schumpeter, Joseph A. (1954). History of Economic Analysis, pp. 97-115. Oxford.
  54. ^ NA (2007). "mercantilism," The New Encyclopædia Britannica, v. 8, p. 26. 
  55. ^ Blaug, Mark (2007). "The Social Sciences: Economics". The New Encyclopædia Britannica, v. 27, p. 343.
  56. ^ NA (2007). "physiocrat," The New Encyclopædia Britannica, v. 9, p. 414.. 
  57. ^ Blaug, Mark (1997, 5th ed.) Economic Theory in Retrospect, pp, 24-28. Cambridge.
  58. ^ Blaug, Mark (2007). "The Social Sciences: Economics". The New Encyclopædia Britannica, v. 27, p. 343.
  59. ^ Blaug, Mark (1987). "classical economics". The New Palgrave: A Dictionary of Economics, v. 1, pp. 434-35 Blaug notes less widely used datings and uses of 'classical economics', including those of Marx and Keynes.
  60. ^ Smith, Adam (1776). The Wealth of Nations, Bk. 1, Ch. 5, 6.
  61. ^ Roemer, J.E. (1987). "Marxian Value Analysis". The New Palgrave: A Dictionary of Economics, v. 3, 383.
  62. ^ Mandel, Ernest (1987). "Marx, Karl Heinrich", The New Palgrave: A Dictionary of Economicsv. 3, pp. 372, 376.
  63. ^ Vianello, Fernando (1987). "labour theory of value," The New Palgrave: A Dictionary of Economics, v. 3, pp. 111-12.
  64. ^ Baradwaj Krishna (1987). "vulgar economy," The New Palgrave: A Dictionary of Economics, v. 3, p. 831.
  65. ^ Campos, Antonietta (1987). "marginalist economics", The New Palgrave: A Dictionary of Economics, v. 3, p. 320
  66. ^ Hicks, J.R. (1937). "Mr. Keynes and the 'Classics': A Suggested Interpretation," Econometrica, 5(2), pp. 147-159.
  67. ^ Blanchard, Olivier Jean (1987). "neoclassical synthesis," The New Palgrave: A Dictionary of Economics, v. 3, pp. 634-36.
  68. ^ Keynes, John Maynard (1936). The General Theory of Employment, Interest and Money. London: Macmillan. ISBN 1-57392-139-4. 
  69. ^ Blaug, Mark (2007). "The Social Sciences: Economics," The New Encyclopædia Britannica, v. 27, p. 347. Chicago.
  70. ^ Tarshis, L. (1987). "Keynesian Revolution", The New Palgrave: A Dictionary of Economics]], v. 3, pp. 47-50.
  71. ^ Samuelson, Paul A., and William D. Nordhaus (2004). Economics, p. 5.
  72. ^ Blaug, Mark (2007). "The Social Sciences: Economics," The New Encyclopædia Britannica, v. 27, p. 346. Chicago.
  73. ^ Harcourt, G.C.(1987). "post-Keynesian economics," The New Palgrave: A Dictionary of Economics, v. 3, pp. 47-50.
  74. ^ a b Smith, Adam (1776). Wealth of Nations, edited by C. J. Bullock. Vol. X. The Harvard Classics. New York: P.F. Collier & Son, 1909–14; Bartleby.com, 2001.
  75. ^ Hume, David; Copley, Stephen and Edgar, Andrew, editors (1998). "Of the Balance of Trade" Selected Essays. New York: Oxford University Press, USA, 188. ISBN 978-0192836212. 
  76. ^ Mill, John Stuart (1848). Principles of Political Economy with Some of Their Applications to Social Philosophy. Boston: C.C. Little & J. Brown, 1, 8. ISBN 978-0192836212. 
  77. ^ Ruskin, John (1860) The Veins of Wealth. Cornhill Magazine. Retrieved on 2007-03-17. Reprinted as Unto This Last, 1862
  78. ^ Ruskin, John (1860). Ad Valorem. Cornhill Magazine. Retrieved on 2007-03-17. Reprinted as Unto This Last, 1862
  79. ^ Marshall, Alfred (1890). Principles of Economics. London: Macmillan and Co., Ltd, 8th ed., 1920, I.I.1. 
  80. ^ Critical examination of various positions on this issue can be found in Karl R. Popper's The Poverty of Historicism (1957). London and New York: Routledge; reprint ed. 1988 (paper). ISBN 9780415065696
  81. ^ The Economics of Fair Play. Karl Sigmund, Ernst Fehr and Martin A. Nowak in Scientific American, Vol. 286, No. 1, pages 82-87; January 2002
  82. ^ The Nature of Human Altruism. Ernst Fehr and Urs Fischbacher in Nature, Vol. 425, pages 785-791; October 23, 2003.
  83. ^ Andrew Oswald, ‘‘Happiness and Economic Performance,’’ Economic Journal 107 (1997): p. 1815–1831.
  84. ^ Richardson, Dick (2001-01-28). Economics is NOT Natural Science! (It is technology of Social Science.). R.H. Richardson. Retrieved on 2007-03-17.
  85. ^ a b Richard Pettinger, Economics Teacher - Economics - The Dismal Science, economicshelp.org
  86. ^ Roth, Alvin E. (1999). Is Economics a Science? (Of course it is...). Unpublished letter to the Economist. Alvin E. Roth. Retrieved on 2007-03-17. Roth is the Gund Professor of Economics and Business Administration, Harvard Economics Department and Harvard Business School
  87. ^ CORRESPONDENCE - Econ Journal Watch, Volume 1, Number 3, December 2004, pp 539-545
  88. ^ Hayek, Friedrich A. (1974). The Pretence of Knowledge. Lecture to the memory of Alfred Nobel. Nobleprize.org. Retrieved on 2007-09-26.
  89. ^ Rappaport, Steven (December 1996). Abstraction and unrealistic assumptions in economics. Volume 3 Number 2. Journal of Economic Methodology. Retrieved on 2007-03-17.
  90. ^ The Economics of Fair Play. Karl Sigmund, Ernst Fehr and Martin A. Nowak in Scientific American, Vol. 286, No. 1, pages 82-87; January 2002
  91. ^ The Nature of Human Altruism. Ernst Fehr and Urs Fischbacher in Nature, Vol. 425, pages 785-791; October 23, 2003.
  92. ^ Andrew Oswald, ‘‘Happiness and Economic Performance,’’ Economic Journal 107 (1997): p. 1815–1831.
  93. ^ Frey, Bruno S.; Pommerehne, Werner W.; Schneider, Friedrich; Gilbert, Guy (December 1984). "Consensus and Dissension Among Economists: An Empirical Inquiry". The American Economic Review 74 (5).  Accessed on 2007-03-17.
  94. ^ McCloskey, Deirdre N. (1983–2005). Rhetorical Criticism in Economics. Articles by Deirdre McCloskey. www.deirdremccloskey.org. Retrieved on 2007-03-17. McCloskey is Distinguished Professor of Economics, History, English, and Communication at the University of Illinois at Chicago.
  95. ^ McCloskey, D. N. (1985) The Rhetoric of Economics [2] (Madison, University of Wisconsin Press).
  96. ^ The Origin of Economic Ideas, Guy Routh (1989)
  97. ^ Dr. Locke Carter (Summer 2006 graduate course) - Texas Tech University
  98. ^ 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
  99. ^ Political Communication: Rhetoric, Government, and Citizens, second edition, Dan F. Hahn
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  105. ^ E.F.Schumacher: Small is Beautiful, Economics as if People matter.
  106. ^ Douglas Hubbard, "How to Measure Anything: Finding the Value of Intangibles in Business", John Wiley & Sons, 2007.
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Lionel Charles Robbins, Baron Robbins (1898 - 1984) was a British economist of the 20th century who proposed one of the early contemporary definitions of economics, Economics is a science which studies human behavior as a relationship between ends and scarce means which have alternative uses. ... David D. Friedman (b. ... Logo of the World Bank The World Bank Group is a group of five international organizations responsible for providing finance to countries for purposes of development and poverty reduction, and for encouraging and safeguarding international investment. ... William Dawbney Bill Nordhaus (born May 31, 1941 in Albuquerque, New Mexico) is the Sterling Professor of Economics at Yale University. ... Mark Blaug (April 3,1927, the Hague, Netherlands -) is a British economist, who has covered a broad range of topics over his long career. ... Hal Ronald Varian is a central academic in the economics of information technology and the information economy. ... Gerard Debreu was a naturalized US citizen from France Gerard Debreu (July 4, 1921 – December 31, 2004) was a French economist and mathematician (In July 1975, he became a naturalized citizen of the United States). ... This article does not cite any references or sources. ... Economics is a textbook by American economists Paul Samuelson and William Nordhaus. ... Hirofumi Uzawa (宇沢弘文 1928 - ) is a Japanese economist, professor emeritus of Tokyo University, and a member of the Japan Academy. ... Robert L. Heilbroner (March 24, 1919 – January 4, 2005) was an American economist. ... William D. Nordhaus (born May 31, 1941 in Albuquerque, New Mexico) is the Sterling Professor of Economics at Yale University. ... Economics is a textbook by American economists Paul Samuelson and William Nordhaus. ... Stephen A. Ross is the Franco Modigliani Professor of Finance and Economics at the MIT Sloan School of Management. ... Israel Robert John Aumann (ישראל אומן) (born June 8, 1930) is an Israeli mathematician and a member of the United States National Academy of Sciences. ... Richard B. Freeman (born 1943) is one of the leading labor economists in North America. ... David D. Friedman (b. ... Richard Allen Posner (born January 11, 1939, in New York City) is currently a judge on the United States Court of Appeals for the Seventh Circuit. ... Ronald Harry Coase (b. ... The Journal of Law and Economics is an academic journal published by the University of Chicago Press. ... Richard Abel Musgrave (December 14, 1910 - January 15, 2007) was an American economist. ... William Baumol (born February 26, 1922) is a Princeton University economics professor (although he is also affiliated with NYU) who has written extensively about labor market and other economic factors that affect the economy. ... For other persons named John Hicks, see John Hicks (disambiguation). ... John R. Hickss book Value and Capital (1939) is a classic exposition of microeconomic theory. ... Mark Blaug (April 3,1927, the Hague, Netherlands -) is a British economist, who has covered a broad range of topics over his long career. ... Jean-Jacques Laffont (1947-2004) was a French economist specialized in public economics and information theory. ... Economics is a textbook by American economists Paul Samuelson and William Nordhaus. ... Enrico Barone (b. ... Leonid V. Kantorovich. ... Milton Friedman (July 31, 1912 – November 16, 2006) was an American Nobel Laureate economist and public intellectual. ... Milton Friedmans book Essays in Positive Economics (1953) has as its lead an original essay The Methodology of Positive Economics, on which this article focuses. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... Paul Anthony Samuelson (born May 15, 1915, in Gary, Indiana) is an American neoclassical economist known for his contributions to many fields of economics, beginning with his general statement of the comparative statics method in his 1947 book Foundations of Economic Analysis. ... Foundations of Economic Analysis is a book by Paul A. Samuelson published in 1947 (Enlarged ed. ... Mark Blaug (April 3,1927, the Hague, Netherlands -) is a British economist, who has covered a broad range of topics over his long career. ... Marx is a common German surname. ... John Maynard Keynes John Maynard Keynes [&#712;ke&#618;ns], 1st Baron Keynes of Tilton (June 5, 1883 - April 21, 1946) was an English economist, whose radical ideas had a major impact on modern economic and political thought. ... John Roemer is an American economist and political scientist. ... Ernest Mandel Ernest Ezra Mandel, also known by various pseudonyms such as Ernest Germain, Pierre Gousset, Henri Vallin, Walter etc. ... For other persons named John Hicks, see John Hicks (disambiguation). ... The General Theory of Employment Interest and Money is generally considered to be the masterwork of the English economist John Maynard Keynes. ... Economics is a textbook by American economists Paul Samuelson and William Nordhaus. ... For other persons named Adam Smith, see Adam Smith (disambiguation). ... This article is about the philosopher. ... John Stuart Mill (20 May 1806 – 8 May 1873), British philosopher, political economist, civil servant and Member of Parliament, was an influential liberal thinker of the 19th century. ... Upper: Steel-plate engraving of Ruskin as a young man, made circa 1845, scanned from print made circa 1895. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... is the 76th day of the year (77th in leap years) in the Gregorian calendar. ... Upper: Steel-plate engraving of Ruskin as a young man, made circa 1845, scanned from print made circa 1895. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... is the 76th day of the year (77th in leap years) in the Gregorian calendar. ... Alfred Marshall Alfred Marshall (July 26, 1842–July 13, 1924), born in Bermondsey, London, England, became one of the most influential economists of his time. ... Karl Popper Sir Karl Raimund Popper (July 28, 1902 - September 17, 1994), was an Austrian-born, British philosopher of science. ... Year 2001 (MMI) was a common year starting on Monday (link displays the 2001 Gregorian calendar). ... is the 28th day of the year in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... is the 76th day of the year (77th in leap years) in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... is the 76th day of the year (77th in leap years) in the Gregorian calendar. ... Harvard Business School, officially named the Harvard Business School: George F. Baker Foundation, and also known as HBS, is one of the graduate schools of Harvard University. ... Friedrich August von Hayek, CH (May 8, 1899 in Vienna – March 23, 1992 in Freiburg) was an Austrian-born British economist and political philosopher known for his defense of liberal democracy and free-market capitalism against socialist and collectivist thought in the mid-20th century. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... is the 269th day of the year (270th in leap years) in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... is the 76th day of the year (77th in leap years) in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... is the 76th day of the year (77th in leap years) in the Gregorian calendar. ... Deirdre N. McCloskey (Born Donald N. McCloskey) (1942 - ) is an American economist and professor. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... is the 76th day of the year (77th in leap years) in the Gregorian calendar. ... This article is about the University of Illinois at Chicago. ... Orley Ashenfelter is a Frisch Medal winning economist who analyzed the results of the Judgment of Paris wine tasting event with Richard E. Quandt. ... The International Encyclopedia of the Social & Behavioral Sciences (2001), edited by Neil J. Smelser and Paul B. Baltes, is a 26-volume work. ...

Further reading

  • Frontiers in Economics - ed. K. F. Zimmermann, Springer-Science, 2002. - A summary of surveys on different areas in economics.
  • The Autistic Economist - Yale Economic Review - How and why the dismal science embraces theory over reality.
  • Nature of Things by Jean-Baptiste Say - an essay in which Say claims that economics is not an ethical system that one can simply refute on the basis that one does not accept its values: it is a collection of theories and models that explain inductively found principles.

Jean-Baptiste Say (January 5, 1767 – November 15, 1832) was a French economist and businessman. ...

External links

General information

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Wikipedia does not have an article with this exact name. ... Image File history File links Wikibooks-logo. ... Image File history File links Wikiquote-logo. ... Image File history File links Wikisource-logo. ... Image File history File links Commons-logo. ... Image File history File links WikiNews-Logo. ... Image File history File links Wikiversity-logo-Snorky. ... Image File history File links Wikibooks-logo-en. ... The Open Directory Project (ODP), also known as dmoz (from , its original domain name), is a multilingual open content directory of World Wide Web links owned by Netscape that is constructed and maintained by a community of volunteer editors. ... The American Economic Association, or AEA, is the oldest and most important professional organization in the field of economics. ...

Institutions and organizations

Study resources

  • Economics textbooks on Wikibooks
  • MERLOT Learning Materials: Economics: US-based database of learning materials
  • The United economic encyclopedia
  • 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. Net Economic History Services
  • Introduction to Economics: Short Creative commons-licensed introduction to basic economics

  Results from FactBites:
 
Library of Economics and Liberty (734 words)
Monthly economics articles by professors and thinkers, including frequent contributions by Mike Munger, Fred McChesney, and articles by David Levy and Sandra Peart on the origins of the term "the dismal science" and the history of economic thought.
An economics blog, EconLog, with co-bloggers Bryan Caplan and Arnold Kling, on topics ranging from free trade to immigration to the influence of economic thought on films, comics, and novels.
Monthly columns on economic topics of interest outside the United States by Anthony de Jasay and Ibsen Martinez.
Economics - Wikipedia, the free encyclopedia (5050 words)
Economic logic is increasingly applied to any problem determining economic value (such as politics, religion, psychology, history and dating).
Various schools of heterodox economics, for instance socialist economics, green economics and associative economics, seek to explain economic phenomena using different basic assumptions, for example by emphasising that economics is primarily concerned with exchanges of values.
John Maynard Keynes once remarked that "Economics is the science of thinking."{See Keynes, Moggridge1976 p.28.} Broadly, the history of the study moved from the study of "wealth" to "welfare" to the idea of studying trade-offs.
  More results at FactBites »

 
 

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