Notes til midterm-2

Notes til midterm-2 - Classical Economics - Adam Smith...

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Classical Economics - Adam Smith 1700's, emphasized laissez-faire ideology, and free-market capitalism. - Keynesian Economics - John Maynard Keynes, diverged from classical economics in several ways, mainly in terms of unemployment, b/c classicalists believed that unemployment was at zero, we all know this is bs. Also in the quantity theory of money and supply side variables. Took more a stance in favor of fiscal policy (i.e. government spending, taxation, etc) rather than monetary policy (prices, wages, money supply) - Neo-Liberal - Milton Friedman and the University of Chicago. Emphasized the role of monetary policy and believed that the supply of money was the main factor in determining the level of economic activity. - Neo-Keynesian - already in your notes. Joe Stiglitz, demand side variables etc, dont know too much about this one. The substantivist , first proposed by Karl Polanyi In The Great Transformation , argues that the term ' economics ' has two meanings : a. neoclassical economist: economics is the logic of rational action and decision- making, as rational choice between the alternative uses of limited (scarce) means, as 'economising,' 'maximizing,' or 'optimizing.' b. Substantive economics - It refers to how humans make a living interacting within their social and natural environments. neither rational decision-making nor conditions of scarcity. A society's livelihood strategy is seen as an adaptation to its environment and material conditions, a process which may or may not involve utility maximization. Economics is the way society meets material needs Classical economics is widely regarded as the first modern school of economic thought . It is the idea that free markets can regulate themselves. Classical economists attempted and partially succeeded to explain economic growth and development. They produced their "magnificent dynamics" during a period in which capitalism was emerging from a past feudal society and in which the industrial revolution was leading to vast changes in society. These changes also raised the question of how a society could be organized around a system in which every individual sought his or her own (monetary) gain. Classical economists – NOT an analysis of ruler's personal interests, BUT a class-based interest
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Notes til midterm-2 - Classical Economics - Adam Smith...

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