Neoclassical economics is a term variously used for approaches to economics Economics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek οἰκονομία from οἶκος (oikos, "house") + νόμος (nomos, "custom" or "law"), hence "rules of the house(hold)". Current economic focusing on the determination of prices, outputs, and income distributions Distribution in economics refers to the way total output or income is distributed among individuals or among the factors of production (Samuelson and Nordhaus, 2001, p. 762). In general theory and the national income and product accounts, each unit of output corresponds to a unit of income. One use of national accounts is for classifying factor in markets through supply and demand Supply and demand is an economic model based on price, utility and quantity in a market. It concludes that in a competitive market, price will function to equalize the quantity demanded by consumers, and the quantity supplied by producers, resulting in an economic equilibrium of price and quantity, often as mediated through a hypothesized maximization of income-constrained utility In economics, utility is a measure of the relative satisfaction from, or desirability of, consumption of various goods and services. Given this measure, one may speak meaningfully of increasing or decreasing utility, and thereby explain economic behavior in terms of attempts to increase one's utility. For illustrative purposes, changes in utility by individuals and of cost-constrained profits In economics, economic profit is the difference between a company's total revenue and its opportunity costs. It is the increase in wealth that an investor has from making an investment, taking into consideration all costs associated with that investment including the opportunity cost of capital of firms employing available information and factors of production, in accordance with rational choice theory Rational choice theory, also known as rational action theory, is a framework for understanding and often formally modeling social and economic behavior. It is the dominant theoretical paradigm in microeconomics. It is also central to modern political science and is used by scholars in other disciplines such as sociology and philosophy.[1] Neoclassical economics dominates microeconomics, and together with Keynesian economics Keynesian economics (also called Keynesianism and Keynesian Theory) is a macroeconomic theory based on the ideas of 20th-century British economist John Maynard Keynes. Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and therefore advocates active policy responses by the public sector, forms the neoclassical synthesis Neoclassical synthesis was a postwar academic movement in economics that attempted to absorb the macroeconomic thought of John Maynard Keynes into the thought of neoclassical economics. Mainstream economics is largely dominated by the synthesis, being largely Keynesian on macroeconomics and neoclassical on microeconomics, which dominates mainstream economics Mainstream economics is a loose term used to refer to the non-heterodox economics taught in prominent universities. It is most closely associated with neoclassical economics, or more precisely by the neoclassical synthesis, which combines neoclassical approach to microeconomics with Keynesian approach to macroeconomics today.[2] There have been many critiques of neoclassical economics, often incorporated into newer versions of neoclassical theory as human awareness of economic criteria change.
The term was originally introduced by Thorstein Veblen Thorstein Bunde Veblen, born Tosten Bunde Veblen was a Norwegian-American sociologist and economist and a primary mentor, along with John R. Commons, of the institutional economics movement. He was an impassioned critic of the performance of the American economy, and is most famous for his book The Theory of the Leisure Class (1899) in 1900, in his Preconceptions of Economic Science, to distinguish marginalists Marginalism is the use of marginal concepts within economics. The central concept of marginalism proper is that of marginal utility, but marginalists following the lead of Alfred Marshall were further heavily dependent upon the concept of marginal physical productivity in their explanation of cost; and the neoclassical tradition that emerged from in the tradition of Alfred Marshall Alfred Marshall was an English economist and one of the most influential economists of his time. His book, Principles of Economics (1890), brings the ideas of supply and demand, of marginal utility and of the costs of production into a coherent whole. It became the dominant economic textbook in England for a long period from those in the Austrian School The Austrian School is a school of economic thought that emphasizes the spontaneous organizing power of the price mechanism. Austrians hold that the complexity of human behavior makes mathematical modeling of the evolving market extremely difficult (or undecidable) and advocate a laissez faire approach to the economy. Austrian School economists.[3][4] It was later used by John Hicks Sir John Richard Hicks was one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the field of economics were his statement of consumer demand theory in microeconomics, and the IS/LM model, which summarised a Keynesian view of macroeconomics. In 1972, Hicks was awarded the, George Stigler George Joseph Stigler was a U.S. economist. He won the Nobel Memorial Prize in Economic Sciences in 1982, and was a key leader of the Chicago School of Economics, along with his close friend Milton Friedman, and others who presumed that significant disputes amongst marginalist schools had been largely resolved[5] to include the work of Carl Menger Carl Menger was the founder of the Austrian School of economics, famous for contributing to the development of the theory of marginal utility that refuted the cost-of-production theories of value developed by the classical economists such as Adam Smith and David Ricardo, William Stanley Jevons William Stanley Jevons was an English economist and logician. His book The Theory of Political Economy (1871) expounded upon the "final" (marginal) utility theory of value. Jevons' work, along with similar discoveries made by Carl Menger in Vienna (1871) and by Léon Walras in Switzerland (1874), marked the opening of a new period in the, John Bates Clark John Bates Clark was an American neoclassical economist. He was one of the pioneers of the marginalist revolution and opponent to the Institutionalist school of economics, and spent most of his career teaching at Columbia University and many others.[4] Today it is usually used to refer to mainstream economics Mainstream economics is a loose term used to refer to the non-heterodox economics taught in prominent universities. It is most closely associated with neoclassical economics, or more precisely by the neoclassical synthesis, which combines neoclassical approach to microeconomics with Keynesian approach to macroeconomics, although it has also been used as an umbrella term An umbrella term is a word that provides a superset or grouping of related concepts, also called a hypernym encompassing a number of mainly defunct schools of thought A school of thought is a collection or group of people who share common characteristics of opinion or outlook of a philosophy, discipline, belief, social movement, cultural movement, or art movement. There have been several schools of economic thought throughout history,[6] notably excluding institutional economics Institutional economics, known by some as institutionalist political economy, focuses on understanding the role of human-made institutions in shaping economic behaviour. The institutional economists were typically critical of US American social, financial and business institutions. What is now called new institutional economics, is a very, various historical schools of economics The Historical school of economics was an approach to academic economics and to public administration that emerged in 19th century in Germany, and held sway there until well into the 20th century, and Marxian economics Marxian economics are economic theories based on the works of Karl Marx. Adherents of Marxian economics, particularly in academia, distinguish it from Marxism as a political ideology, arguing that Marx's approach to understanding the economy is intellectually independent of his advocacy of revolutionary socialism or his belief in the proletarian, in addition to various other heterodox approaches to economics Heterodox economics refers to the approaches, or schools of economic thought, that are considered outside of mainstream, that is, orthodox economics. Heterodox economics is an umbrella term used to cover various separate unorthodox approaches, schools, or traditions. These include institutional, post-Keynesian, socialist, Marxian, feminist,.
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For the last 200 years or so neo classical economics has recognised only two factors as the basis for production manpower and capital These two factors overtook traditional natural
Natalie Bennett
Sat, 03 Oct 2009 22:36:28 GM
Being very much in the former group of readers (I did a very bad university course in what amounted to, although wasn't called, . neoclassical economics. 20 years ago, which thoroughly discouraged me from pursuing a subject so clearly ...
Q. Can someone contrast Classical/Neo classical and Keynesian/Neo Keysian economics. Just their basic arguments.?
Asked by bigluchini - Fri May 2 23:35:19 2008 - - 2 Answers - 0 Comments
A. In your question, you have bitten off a lot of information. I will try to answer on part of your question... Keynesian economics is based on the idea that to minimize the downturn cycle of the economy, the government should spend money on infrastructure and so forth to stimulate the economy. He also states that interest rates should be lowered. Basically spend your way out of trouble. Almost all modern governments employ these tactics, and I think it works well with the exception that you might run up your debt. Classical economics is the basis for neoclassical economics and basically modern banking and monetary policy. Classical economist include Adam Smith, Ricardo, and even Karl Marx. Neoclassical economics and Neokeynesian… [cont.]
Answered by LSU Tigers - Sat May 3 00:18:27 2008
