Portal:Economics

Carl Menger von Wolfensgrün (/ˈmɛŋɡər/; German: [ˈmɛŋɐ]; 28 February 1840 – 26 February 1921) was an Austrian economist who contributed to the marginal theory of value. Menger is considered the founder of the Austrian school of economics.

In building his marginalist approach, Menger rejected many established views of classical economics. He directly disputed the view of the "German school" that economic theory could be derived from history. Departing from the cost-of-production theory of value—the prevailing theory of Adam Smith, David Ricardo, and Karl Marx—Menger's subjective theory of value emphasized role of mutual agreement in deriving prices. Although he had few readers outside Vienna until late in his career, disciples including Eugen von Böhm-Bawerk and Friedrich von Wieser brought his theories into wider readership. Friedrich Hayek wrote that the Austrian school's "fundamental ideas belong fully and wholly to Carl Menger." (Full article...)

In the history of economic thought, a school of economic thought is a group of economic thinkers who share or shared a mutual perspective on the way economies function. While economists do not always fit within particular schools, particularly in the modern era, classifying economists into schools of thought is common. Economic thought may be roughly divided into three phases: premodern (Greco-Roman, Indian, Persian, Islamic, and Imperial Chinese), early modern (mercantilist, physiocrats) and modern (beginning with Adam Smith and classical economics in the late 18th century, and Karl Marx and Friedrich Engels' Marxian economics in the mid 19th century). Systematic economic theory has been developed primarily since the beginning of what is termed the modern era.

Currently, the great majority of economists follow an approach referred to as mainstream economics (sometimes called 'orthodox economics'). Economists generally specialize into either macroeconomics, broadly on the general scope of the economy as a whole, and microeconomics, on specific markets or actors. (Full article...)

Malthusianism is a theory that population growth is potentially exponential, according to the Malthusian growth model, while the growth of the food supply or other resources is linear, which eventually reduces living standards to the point of triggering a population decline. This event, called a Malthusian catastrophe (also known as a Malthusian trap, population trap, Malthusian check, Malthusian snatch, Malthusian crisis, Point of Crisis, or Malthusian crunch) has been predicted to occur if population growth outpaces agricultural production, thereby causing famine or war. According to this theory, poverty and inequality will increase as the price of assets and scarce commodities goes up due to fierce competition for these dwindling resources. This increased level of poverty eventually causes depopulation by decreasing birth rates. If asset prices keep increasing, social unrest would occur, which would likely cause a major war, revolution, or a famine. Societal collapse is an extreme but possible outcome from this process. The theory posits that such a catastrophe would force the population to "correct" back to a lower, more easily sustainable level (quite rapidly, due to the potential severity and unpredictable results of the mitigating factors involved, as compared to the relatively slow time scales and well-understood processes governing unchecked growth or growth affected by preventive checks). Malthusianism has been linked to a variety of political and social movements, but almost always refers to advocates of population control.

These concepts derive from the political and economic thought of the Reverend Thomas Robert Malthus, as laid out in his 1798 writings, An Essay on the Principle of Population. Malthus suggested that while technological advances could increase a society's supply of resources, such as food, and thereby improve the standard of living, the abundance of resources would enable population growth, which would eventually bring the supply of resources for each person back to its original level. Some economists contend that since the Industrial Revolution in the early 19th century, mankind has broken out of the trap. Others argue that the continuation of extreme poverty indicates that the Malthusian trap continues to operate. Others further argue that due to lack of food availability coupled with excessive pollution, developing countries show more evidence of the trap as compared to developed countries. A similar, more modern concept, is that of human overpopulation. (Full article...)

Agent-based computational economics (ACE) is the area of computational economics that studies economic processes, including whole economies, as dynamic systems of interacting agents. As such, it falls in the paradigm of complex adaptive systems. In corresponding agent-based models, the "agents" are "computational objects modeled as interacting according to rules" over space and time, not real people. The rules are formulated to model behavior and social interactions based on incentives and information. Such rules could also be the result of optimization, realized through use of AI methods (such as Q-learning and other reinforcement learning techniques).

As part of non-equilibrium economics, the theoretical assumption of mathematical optimization by agents in equilibrium is replaced by the less restrictive postulate of agents with bounded rationality adapting to market forces. ACE models apply numerical methods of analysis to computer-based simulations of complex dynamic problems for which more conventional methods, such as theorem formulation, may not find ready use. Starting from initial conditions specified by the modeler, the computational economy evolves over time as its constituent agents repeatedly interact with each other, including learning from interactions. In these respects, ACE has been characterized as a bottom-up culture-dish approach to the study of economic systems. (Full article...)

Francis Ysidro Edgeworth FBA (8 February 1845 – 13 February 1926) was an Anglo-Irish philosopher and political economist who made significant contributions to the methods of statistics during the 1880s. From 1891 onward, he was appointed the founding editor of The Economic Journal. (Full article...)

Neo-Marxism is a collection of Marxist schools of thought originating from 20th-century approaches to amend or extend Marxism and Marxist theory, typically by incorporating elements from other intellectual traditions such as critical theory, psychoanalysis, or existentialism. Neo-Marxism comes under the broader framework of the New Left. In a sociological sense, neo-Marxism adds Max Weber's broader understanding of social inequality, such as status and power, to Marxist philosophy.

As with many uses of the prefix neo-, some theorists and groups who are designated as neo-Marxists have attempted to supplement the perceived deficiencies of orthodox Marxism or dialectical materialism. Many prominent neo-Marxists, such as Herbert Marcuse and other members of the Frankfurt School, have historically been sociologists and psychologists. (Full article...)

Classical economics, also known as the classical school of economics, or classical political economy, is a school of thought in political economy that flourished, primarily in Britain, in the late 18th and early-to-mid 19th century. It includes both the Smithian and Ricardian schools. Its main thinkers are held to be Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Robert Malthus, and John Stuart Mill. These economists produced a theory of market economies as largely self-regulating systems, governed by natural laws of production and exchange (famously captured by Adam Smith's metaphor of the invisible hand).

Adam Smith's The Wealth of Nations in 1776 is usually considered to mark the beginning of classical economics. The fundamental message in Smith's book was that the wealth of any nation was determined not by the gold in the monarch's coffers, but by its national income. This income was in turn based on the labor of its inhabitants, organized efficiently by the division of labour and the use of accumulated capital, which became one of classical economics' central concepts. (Full article...)

Ernst Friedrich Schumacher CBE (16 August 1911 – 4 September 1977) was a German-born British statistician and economist who is best known for his proposals for human-scale, decentralised and appropriate technologies. He served as Chief Economic Advisor to the British National Coal Board from 1950 to 1970, and founded the Intermediate Technology Development Group (now known as Practical Action) in 1966.

In 1995, his 1973 book Small Is Beautiful: A Study of Economics As If People Mattered was ranked by The Times Literary Supplement as one of the 100 most influential books published since World War II. In 1977 he published A Guide for the Perplexed as a critique of materialistic scientism and as an exploration of the nature and organisation of knowledge. (Full article...)

Evolutionary economics is a school of economic thought that is inspired by evolutionary biology. Although not defined by a strict set of principles and uniting various approaches, it treats economic development as a process rather than an equilibrium and emphasizes change (qualitative, organisational, and structural), innovation, complex interdependencies, self-evolving systems, and limited rationality as the drivers of economic evolution. The support for the evolutionary approach to economics in recent decades seems to have initially emerged as a criticism of the mainstream neoclassical economics, but by the beginning of the 21st century it had become part of the economic mainstream itself.

Evolutionary economics does not take the characteristics of either the objects of choice or of the decision-maker as fixed. Rather, it focuses on the non-equilibrium processes that transform the economy from within and their implications, considering interdependencies and feedback. The processes in turn emerge from the actions of diverse agents with bounded rationality who may learn from experience and interactions and whose differences contribute to the change. (Full article...)

Joseph Alois Schumpeter (German: [ˈʃʊmpeːtɐ]; February 8, 1883 – January 8, 1950) was an Austrian political economist. He served briefly as Finance Minister of Austria in 1919. In 1932, he emigrated to the United States to become a professor at Harvard University, where he remained until the end of his career, and in 1939 obtained American citizenship.

Schumpeter was one of the most influential economists of the early 20th century, and popularized creative destruction, a term coined by Werner Sombart. His magnum opus is considered Capitalism, Socialism and Democracy. (Full article...)

Heterodox economics is a broad, relative term referring to schools of economic thought which are not commonly perceived as belonging to mainstream economics. There is no absolute definition of what constitutes heterodox economic thought, as it is defined in contrast to the most prominent, influential or popular schools of thought in a given time and place.

Groups typically classed as heterodox in current discourse include the Austrian, ecological, Marxist-historical, post-Keynesian, and modern monetary approaches. (Full article...)

Hans-Hermann Hoppe (/ˈhɒpə/; German: [ˈhɔpə]; born 2 September 1949) is a German-American academic associated with Austrian School economics, anarcho-capitalism, right-wing libertarianism, and opposition to democracy. He is professor emeritus of economics at the University of Nevada, Las Vegas (UNLV), senior fellow of the Mises Institute think tank, and the founder and president of the Property and Freedom Society.

Hoppe has written extensively in opposition to democracy, notably in his 2001 book Democracy: The God That Failed. The book favors exclusionary "covenant communities" that are "founded for the purpose of protecting family and kin". A section of the book favoring exclusion of democrats and homosexuals from society helped popularize Hoppe on the far-right. (Full article...)

Karl Marx (German: [ˈkaʁl ˈmaʁks]; 5 May 1818 – 14 March 1883) was a German philosopher, political theorist, economist, journalist, and revolutionary socialist. He is best-known for the 1848 pamphlet The Communist Manifesto (written with Friedrich Engels), and his three-volume Das Kapital (1867–1894), a critique of classical political economy which employs his theory of historical materialism in an analysis of capitalism, in the culmination of his life's work. Marx's ideas and their subsequent development, collectively known as Marxism, have had enormous influence.

Born in Trier in the Kingdom of Prussia, Marx studied at the universities of Bonn and Berlin, and received a doctorate in philosophy from the University of Jena in 1841. A Young Hegelian, he was influenced by the philosophy of Georg Wilhelm Friedrich Hegel, and both critiqued and developed Hegel's ideas in works such as The German Ideology (written 1846) and the Grundrisse (written 1857–1858). While in Paris, Marx wrote his Economic and Philosophic Manuscripts of 1844 and met Engels, who became his closest friend and collaborator. After moving to Brussels in 1845, they were active in the Communist League, and in 1848 they wrote The Communist Manifesto, which expresses Marx's ideas and lays out a programme for revolution. Marx was expelled from Belgium and Germany, and in 1849 moved to London, where he wrote The Eighteenth Brumaire of Louis Bonaparte (1852) and Das Kapital. From 1864, Marx was involved in the International Workingmen's Association (First International), in which he fought the influence of anarchists led by Mikhail Bakunin. In his Critique of the Gotha Programme (1875), Marx wrote on revolution, the state and the transition to communism. He died stateless in 1883 and was buried in Highgate Cemetery. (Full article...)

Gary Stanley Becker (/ˈbɛkər/; December 2, 1930 – May 3, 2014) was an American economist who received the 1992 Nobel Memorial Prize in Economic Sciences. He was a professor of economics and sociology at the University of Chicago, and was a leader of the third generation of the Chicago school of economics.

Becker was awarded the Nobel Memorial Prize in Economic Sciences in 1992 and received the United States Presidential Medal of Freedom in 2007. A 2011 survey of economics professors named Becker their favorite living economist over the age of 60, followed by Kenneth Arrow and Robert Solow. Economist Justin Wolfers called him "the most important social scientist in the past 50 years." (Full article...)

Adam Smith (baptised 16 June [O.S. 5 June] 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the field of political economy and key figure during the Scottish Enlightenment. Seen by many as the "father of economics" or the "father of capitalism", he is primarily known for two classic works: The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). The latter, often abbreviated as The Wealth of Nations, is regarded as his magnum opus, marking the inception of modern economic scholarship as a comprehensive system and an academic discipline. Smith refuses to explain the distribution of wealth and power in terms of divine will and instead appeals to natural, political, social, economic, legal, environmental and technological factors, as well as the interactions among them. The work is notable for its contribution to economic theory, particularly in its exposition of concept of absolute advantage.

Smith studied social philosophy at the University of Glasgow and at Balliol College, Oxford, where he was one of the first students to benefit from scholarships set up by John Snell. Following his graduation, he delivered a successful series of public lectures at the University of Edinburgh, that met with acclaim. This led to a collaboration with David Hume during the Scottish Enlightenment. Smith obtained a professorship at Glasgow, where he taught moral philosophy. During this period, he wrote and published The Theory of Moral Sentiments. Subsequently, he assumed a tutoring position that facilitated travel throughout Europe, where he encountered intellectual figures of his era. (Full article...)

The pluralism in economics movement is a campaign to change the teaching and research in economics towards more openness in its approaches, topics and standpoints it considers. The goal of the movement is to "reinvigorate the discipline ... [and bring] economics back into the service of society". Some have argued that economics had greater scientific pluralism in the past compared to the monist approach that is prevalent today. Pluralism encourages the inclusion of a wide variety of neoclassical and heterodox economic theories—including classical, Post-Keynesian, institutional, ecological, evolutionary, feminist, Marxist, and Austrian economics, stating that "each tradition of thought adds something unique and valuable to economic scholarship". (Full article...)

The Lausanne School of economics, sometimes referred to as the Mathematical School, refers to the neoclassical economics school of thought surrounding Léon Walras and Vilfredo Pareto. It is named after the University of Lausanne, at which both Walras and Pareto held professorships. Polish economist Leon Winiarski is also said to have been a member of the Lausanne School. (Full article...)

John von Neumann (/vɒn ˈnɔɪmən/ von NOY-mən; Hungarian: Neumann János Lajos [ˈnɒjmɒn ˈjaːnoʃ ˈlɒjoʃ]; December 28, 1903 – February 8, 1957) was a Hungarian and American mathematician, physicist, computer scientist and engineer. Von Neumann had perhaps the widest coverage of any mathematician of his time, integrating pure and applied sciences and making major contributions to many fields, including mathematics, physics, economics, computing, and statistics. He was a pioneer in building the mathematical framework of quantum physics, in the development of functional analysis, and in game theory, introducing or codifying concepts including cellular automata, the universal constructor and the digital computer. His analysis of the structure of self-replication preceded the discovery of the structure of DNA.

During World War II, von Neumann worked on the Manhattan Project. He developed the mathematical models behind the explosive lenses used in the implosion-type nuclear weapon. Before and after the war, he consulted for many organizations including the Office of Scientific Research and Development, the Army's Ballistic Research Laboratory, the Armed Forces Special Weapons Project and the Oak Ridge National Laboratory. At the peak of his influence in the 1950s, he chaired a number of Defense Department committees including the Strategic Missile Evaluation Committee and the ICBM Scientific Advisory Committee. He was also a member of the influential Atomic Energy Commission in charge of all atomic energy development in the country. He played a key role alongside Bernard Schriever and Trevor Gardner in the design and development of the United States' first ICBM programs. At that time he was considered the nation's foremost expert on nuclear weaponry and the leading defense scientist at the U.S. Department of Defense. (Full article...)

New classical macroeconomics, sometimes simply called new classical economics, is a school of thought in macroeconomics that builds its analysis entirely on a neoclassical framework. Specifically, it emphasizes the importance of foundations based on microeconomics, especially rational expectations.

New classical macroeconomics strives to provide neoclassical microeconomic foundations for macroeconomic analysis. This is in contrast with its rival new Keynesian school that uses microfoundations, such as price stickiness and imperfect competition, to generate macroeconomic models similar to earlier, Keynesian ones. (Full article...)

Jean-Baptiste Say (French: [ʒɑ̃batist sɛ]; 5 January 1767 – 15 November 1832) was a liberal French economist and businessman who argued in favor of competition, free trade and lifting restraints on business. He is best known for Say's law—also known as the law of markets—which he popularized, although scholars disagree as to whether it was Say who first articulated the theory. Moreover, he was one of the first economists to study entrepreneurship and conceptualized entrepreneurs as organizers and leaders of the economy. He was also closely involved in the development of the École spéciale de commerce et d'industrie (ESCP), historically the first business school to be established. (Full article...)

Computational economics is an interdisciplinary research discipline that combines methods in computational science and economics to solve complex economic problems. This subject encompasses computational modeling of economic systems. Some of these areas are unique, while others established areas of economics by allowing robust data analytics and solutions of problems that would be arduous to research without computers and associated numerical methods.

Computational methods have been applied in various fields of economics research, including but not limiting to:    (Full article...)

Eugen Ritter von Böhm-Bawerk (Austrian German: [fɔn bøːm ˈbaːvɛrk]; born Eugen Böhm, 12 February 1851 – 27 August 1914) was an Austrian-school intellectual and political economist who served intermittently as the Minister of Finance of Austria between 1895 and 1904. Böhm-Bawerk is also noted for writing extensive criticisms of Marxism. (Full article...)

Ludwig Heinrich Edler von Mises (/vɒn ˈmiːzɪz/; German: [ˈluːtvɪç fɔn ˈmiːzəs]; September 29, 1881 – October 10, 1973) was an Austrian-American political economist and philosopher of the Austrian school. Mises wrote and lectured extensively on the social contributions of classical liberalism and the central role of consumers in a market economy. He is best known for his work in praxeology, particularly for studies comparing communism and capitalism, as well as for being a defender of classical liberalism in the face of rising illiberalism and authoritarianism throughout much of Europe during the 20th century.

In 1940, Mises emigrated from Austria to the United States to escape the Nazis. On the day German forces entered Vienna, they raided his apartment, confiscating his papers and library, which were believed lost or destroyed until rediscovered decades later in Soviet archives. At the time, Mises was living in Geneva, Switzerland. However, with the imminent Nazi occupation of France threatening to isolate Switzerland within Axis-controlled territory, he and his wife fled through France—avoiding German patrols—and reached the United States via Spain and Portugal. (Full article...)

Friedrich August von Hayek CH FBA (8 May 1899 – 23 March 1992) was an Austrian-born British academic and philosopher. He is known for his contributions to political economy, political philosophy and intellectual history. Hayek shared the 1974 Nobel Memorial Prize in Economic Sciences with Gunnar Myrdal for work on money and economic fluctuations, and the interdependence of economic, social and institutional phenomena. His account of how prices communicate information is widely regarded as an important contribution to economics that led to him receiving the prize. He was a major contributor to the Austrian school of economics.

During his teenage years, Hayek fought in World War I. He later said this experience, coupled with his desire to help avoid the mistakes that led to the war, drew him into economics. He earned doctoral degrees in law in 1921 and political studies in 1923 from the University of Vienna. He subsequently lived and worked in Austria, Great Britain, the United States and Germany. He became a British national in 1938. He studied and taught at the London School of Economics and later at the University of Chicago, before returning to Europe late in life to teach at the Universities of Salzburg and Freiburg. (Full article...)

Paul Anthony Samuelson (May 15, 1915 – December 13, 2009) was an American economist who was the first American to win the Nobel Memorial Prize in Economic Sciences. When awarding the prize in 1970, the Swedish Royal Academies stated that he "has done more than any other contemporary economist to raise the level of scientific analysis in economic theory".

Samuelson was one of the most influential economists of the latter half of the 20th century. In 1996, he was awarded the National Medal of Science. Samuelson considered mathematics to be the "natural language" for economists and contributed significantly to the mathematical foundations of economics with his book Foundations of Economic Analysis. He was author of the best-selling economics textbook of all time: Economics: An Introductory Analysis, first published in 1948. It was the second American textbook that attempted to explain the principles of Keynesian economics. (Full article...)