HISTORY OF ECONOMIC
Rules of the Game and Required Reading
Two options to pass the
final test 60%
2. Session exam
THE NEOCLASSICAL SCHOOL ALFRED MARSHALL
1. The School/Schools
The period, which begins with the Marginalist Revolution (1871) and extends until today is called
the period of the Neoclassical Schools.
The Neoclassic theory is a modern adaptation of the cla
1. Montaigne argued that:
A) buyers and sellers gain both when exchanges are made voluntary.
B) international trade invariably enhances the wealth of both trading nations.
C) the plight of one man is the benefit of another.
D) unnecessary exchange is faci
THE CLASSICAL SCHOOL SAY, BASIAT, and MILL
1. The French Liberal School
The "French Liberal School" - 19th century French economists, which followed the tradition, both
in politics and economics, set by the theorist Jean-Baptiste Say.
In economics, this m
Adam Smith thought that the productivity of labor depends primarily on:
A) workers education.
B) divisions of labor.
C) technologically advanced machines.
D) appropriate wage rates.
Adam Smiths notion of an invisible hand powerfully impl
THE KEYNESIAN SCHOOL JOHN MAYNARD KEYNES
1. John Maynard Keynes(1883-1946)
Born in 1883, Cambridge
Studied at Eton and Cambridge short and unsystematic study of economics.
1905 joined the Bureau of Indian Affairs; 1915 joined the Treasury.
1. The New Approach to Economic Theory
The classical economists preoccupied with the big
questions. They paid little attention to choices and
decisions made by individuals and firms.
Marginalist economists emphasized that prices depend
THE PHYSIOCRATIC SCHOOL
1. The First Self-conscious School of Economic Thought France 1750s1770s
Physio-cracy the rule of the nature.
They attributed a key role to the development of agriculture, which they considered the only
sector capable of producing
THE GERMAN HISTORICAL SCHOOL
1. The School
Historical Background - In the first half of the 19th c.:
-Germany was not a unified national state.
-German economy was mainly rural.
-German economists and officials regarded free trade as a obstacle for the ec
THE RISE OF SOCIALIST THOUGHT AND MARXIAN SOCIALISM
1. Historical Background - The Shock Waves:
The French Revolution (1789-1799)
The absolute monarchy collapsed.
Feudal, aristocratic and religious privileges evaporated under a sustained assault from radi
THE CLASSICAL SCHOOL DAVID RICARDO
1. D. Ricardo and T. Malthus worked in the same historical context
D. Ricardo focused attention on the effects on the economy as a whole of the protection afforded to
agriculture by Corn Laws.
1795 92 s. p
According to Adam Smith the division of labour is limited by the extent of the .
According to Adam Smith the major explanation for economic growth is:
A) the population growth
B) the divi
THE CLASSICAL SCHOOL THOMAS MALTHUS
1. Historical Background
Industrial Revolution, Colonialism, Globalization.
Napoleonic wars stimulated price increases, real wages deteriorated.
Post-1815 problems deflation and readjustment of the British economy.
MERCANTILISM (Between the end of the16th and late 18th century)
1. Mercantilism as the Economic Aspect of Absolutism - By the beginning of the 17th century royal
absolutism had emerged victorious all over of Europe.
Absolutism is characterized by:
THE CLASSICAL SCHOOL OF ECONOMIC THOUGHT - ADAM SMITH
1. The School - between the end of 18th and the first half of 19th c.
Historical background the Industrial Revolution.
The fundamental problems the source of value, the causes of economic growth, the
ANCIENT AND MEDIEVAL ECONOMIC THOUGHT
1. General Historical Background
Human life - dominated by natural phenomena, wars and arbitrary use of political power.
Repetitive cycles of work and life, day by day, year by year were prefe