《Economics from Miss Chen》Chp11.pptVIP

Chapter 11Political Economy 11.1 DEVELOPMENT OF ECONOMIC THEORY pre-eighteenth century Mercantilism, Liberality, 11.1 DEVELOPMENT OF ECONOMIC THEORY pre-eighteenth century seventeenth century nineteenth century Mercantilism Liberality Adam Smith Classical economics John Stuart Mill Alfred Marshall 11.1.1 Classical Economics Western Europe Late 1600s – 1800s Classical economics focused on the outcomes from the sum of individual decisions, rather than thinking only about the actions of the rulers of nations. Freedom in the market place was efficient and desirable Representatives Adam Smith David Ricardo John Stuart Mill Keys Smith’s notion of the role of specialization in driving economic growth with “invisible hand”. Ricardo’s analysis of comparative advantage, and the consequent need for free trade. Mill’s argument for the need for a high degree of individual freedom, both for economic and moral reasons. 11.1.2 Marxian Economics Communist Manifesto Capital – there is inevitable change to social and economic system affirmation (thesis) negation (antithesis) negation of negation 11.1.3 Neo-classical Economics Basis for the microeconomics Representatives William Jevons Carl menger Leon Walras Alfred Marshall Bases Keys 11.1.4 Keynesian Revolution the General Theory of Employment Interest and Money The General Theory GDP = C + I + G + X - M 11.1.5 Revival of Neo-Classical Economics Policies * *