Prominent Schools of Economic Thought: Brief Introduction

Prominent Schools of Economic Thought: Brief Introduction

Here’s a list of prominent schools of economic thought, along with brief descriptions:

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1. Classical Economics

  • Key Figures: Adam Smith, David Ricardo, John Stuart Mill

  • Key Ideas: Markets are self-regulating; the "invisible hand" guides supply and demand.

  • Focus: Long-term growth, free markets, and limited government intervention.

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2. Neoclassical Economics

  • Key Figures: Alfred Marshall, William Stanley Jevons

  • Key Ideas: Consumers and firms act rationally to maximize utility and profit; prices are determined by supply and demand.

  • Focus: Equilibrium, marginal analysis, and mathematical modelling.

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3. Keynesian Economics

  • Key Figure: John Maynard Keynes

  • Key Ideas: Active government intervention is necessary during recessions; demand drives economic output.

  • Focus: Fiscal and monetary policy to manage the business cycle.

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4. Monetarism

  • Key Figure: Milton Friedman

  • Key Ideas: Control of the money supply is key to managing inflation and economic stability.

  • Focus: Monetary policy over fiscal policy; skepticism of government spending.

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5. Austrian School

  • Key Figures: Carl Menger, Ludwig von Mises, Friedrich Hayek

  • Key Ideas: Emphasizes individual choice, spontaneous order, and skepticism of central planning.

  • Focus: Free markets, the importance of entrepreneurship, and the dangers of inflation and intervention.

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6. Marxist Economics

  • Key Figure: Karl Marx

  • Key Ideas: Capitalism inherently leads to inequality and exploitation; historical materialism and class struggle.

  • Focus: Critique of capitalism, labor theory of value, and the role of class conflict.

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7. Development Economics

  • Key Figures: Amartya Sen, Jeffrey Sachs

  • Key Ideas: Focuses on improving the economic well-being of people in developing countries.

  • Focus: Poverty, inequality, institutions, and sustainable growth.

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8. Behavioral Economics

  • Key Figures: Daniel Kahneman, Richard Thaler

  • Key Ideas: Challenges the assumption of rational actors; incorporates psychology into economic decision-making.

  • Focus: Biases, heuristics, and how people actually behave in markets.

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9. Ecological Economics

  • Key Figures: Herman Daly, Nicholas Georgescu-Roegen

  • Key Ideas: Views the economy as a subsystem of the environment; emphasizes sustainability and limits to growth.

  • Focus: Resource limits, environmental costs, and long-term ecological balance.

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10. Institutional Economics

  • Key Figures: Thorstein Veblen, Douglass North

  • Key Ideas: Institutions (laws, norms, cultures) shape economic behavior.

  • Focus: Evolution of economic systems and the role of social structures.


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