History of Economic Thought2013 -14.pptx - History of Economic Thought/Econ 3141 1 Introduction Course objectives The main objective of this course is

History of Economic Thought2013 -14.pptx - History of...

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History of Economic Thought /Econ 3141 Course objectives The main objective of this course is to provide students with a general picture of the development of economics until the emergence of MARGINALIST thinking. The course demonstrates the contributions of mainstream thinkers and deviant thinkers from the orthodoxy of this era in shaping contemporary economic thought. The rationale for studying HET Enhancing ones understanding of contemporary economic thought Providing perspective and understanding of our past and anticipate changes in the future as contributed by various schools with no monopoly of the truth by a single source. Guarding from irresponsible generalizations . 1 1. Introduction
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Subject matter of Economics Economics is a social science that examines the problems of relative scarcity in material requisites of life that societies face. Scarcity arises because the desire to consume more goods and services than are available or because of unlimited wants and limited resources. To mitigate the problem of scarcity, it may require either restricting wants ( by inducing moral restraint on demand ! Or by forcibly imposing austerity!) or increasing the supply of resources ( increasing productivity and output) or both. 2
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Introduction cont’d Whichever way scarcity is addressed there arises a need for a social mechanism of allocating limited resources among unlimited alternative wants . Resource allocation mechanisms determine Who gets and who does not get resources. Which want gets satisfied and which does not Historically four social resource allocating mechanisms were used: Brute force, Tradition, Authority, Market Regardless of which mechanism is used to allocate resources, the harsh reality of scarcity necessitates 3
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Introduction cont’d History of economic thought Versus economic history History of economic thought charts the development of economic thinking about the various economic problems (problems of coping with scarcity) through ages. Economic history tells about the various economic activities that prevailed to create wealth in the past and the various resource allocation mechanisms employed to cope with the problem of scarcity across ages. 4
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Introduction cont’d The central focus of modern economic thought Modern economic theory examines the problems of allocation , distribution, growth and stability (the various ways in which contemporary societies cope with the problems that flow from relative scarcity) The theories on the problems associated with relative scarcity are commonly divided into micro and macro economics. Micro economics considers questions of allocation and distribution ( what to produce and how to produce, how real income and goods are divided among the members of society).
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