Transcript Economics

Modern Economics Theories
Vugar Bayramov,
www.cesd.az
Economics (Management of Household) studies;
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Production
Distribution
Consumption
Economics aims;
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to explain how economies work and how economic
agents interact.
To apply throughout society, in business, finance and
government, but also in crime education and etc.
Common distinctions between;
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Positive economics (describing "what is") and normative
economics (advocating "what ought to be")
Economic theory and applied economics
Mainstream economics more "orthodox" dealing with the
"rationality-individualism-equilibrium nexus") and
heterodox economics (more "radical" dealing with the
"institutions-history-social structure nexus")
Microeconomics ("small" economics) examines the
economic behavior of agents macroeconomics ("big"
economics), unemployment, inflation, monetary and
fiscal policy for an entire economy.
Classic Economics
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Adam Smith;
the effective birth of economics as a separate discipline;
Identification of land, labor, and capital as the three
factors of production and the major contributors to a
nation's wealth;
Ideal economy is a self-regulating market system that
automatically satisfies the economic needs of the
populace
Classic Economics
David Ricardo
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Focusing on the distribution of income among
landowners, workers, and capitalists.
An inherent conflict between landowners on the one
hand and labor and capital on the other.
Growth of population and capital, pressing against a fixed
supply of land, pushes up rents and holds down wages
and profits.
Marxist
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Labour theory of value- the value of a thing was determined
by the labor that went into its production.
Neoclassical economics
Alfred Marshall
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Systematization of supply and demand as joint determinants
of price and quantity in market equilibrium;
Supply and demand affecting both the allocation of output
and the distribution of income
Keynesian economics
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National income in the short run when prices are
relatively inflexible.
Explaination in broad theoretical detail why high labourmarket unemployment might not be self-correcting due
to low effective demand
Chicago School of economics
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Free market advocacy and monetarist ideas
Market economies are inherently stabel
Great Depression was result of a contraction of the
money supply, controlled by the Federal Reserve, and not
by the lack of investment as Keynes