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ECONOMIC THEORIES

This overview covers significant economic theories including Mercantilism, Classical Economics, Marxist Economics, Neoclassical Economics, Keynesian Economics, Monetarism, and Dependency Theory. Each theory's principles are explained, such as Mercantilism's focus on trade balance, Marxist views on labor value, and Keynesian advocacy for government intervention in markets. Understanding these frameworks sheds light on differing perspectives regarding wealth creation, economic efficiency, and the implications of capitalism in both developed and underdeveloped regions.

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ECONOMIC THEORIES

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  1. Andrew Simler ECONOMIC THEORIES

  2. Mercantilism • Mineral resources are wealth • Zero-sum game • Balance of trade • Exports are good, imports are bad • Tariffs

  3. Classical Economics • Value derived from labor • Laissez-faire • Free trade • Competition • “Invisible Hand” • Self-interest

  4. Marxist Economics • Value derived solely from labor (cf. Classical) • Labor itself also valued on this basis • Labor creates surplus value • Inevitable fall in profits • Increased use of machinery • Exploitation of workers • Eventual revolution by oppressed working class

  5. Neoclassical Economics • Value derived from subjective scarcity • Mathematical modeling • Marginalism • Three assumptions • Rational behavior • Maximum utility • Full information

  6. Keynesian Economics • Markets are not perfectly efficient • Recessions and depressions • Government intervention • Supply can exceed demand • Downward spiral in price • Liquidity trap

  7. Monetarism • Reaction against Keynesian thought • Money supply is key • Great Depression was fault of Federal Reserve • Money supply should grow steadily to match growth of economy • The market will then sort out all economic problems • Natural level of unemployment

  8. Dependency Theory • Persistent poverty in underdeveloped countries • Pattern of international interactions • Dominant industrialized powers, poor dependent states • Echoes of imperial/colonial relationship • Self-reinforcing • Supported by elites of dependent states • Consequence of capitalism or power imbalance

  9. References • http://www.investopedia.com/terms/m/mercantilism.asp • https://web.archive.org/web/20110723183642/http://www.newschool.edu/nssr/het/profiles/colbert.htm • http://www.britannica.com/EBchecked/topic/120200/classical-economics • https://web.archive.org/web/20110723182041/http://www.newschool.edu/nssr/het/profiles/ricardo.htm • http://www.economics.utoronto.ca/munro5/MARXECON.htm • https://web.archive.org/web/20110629230810/http://www.newschool.edu/nssr/het/ • http://www.econlib.org/library/Enc1/NeoclassicalEconomics.html • https://web.archive.org/web/20110723173747/http://www.newschool.edu/nssr/het/essays/margrev/ncintro.htm • http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html • https://web.archive.org/web/20111029053933/http://www.newschool.edu/nssr/het/profiles/keynes.htm • http://www.economist.com/economics-a-to-z/m#node-21529789 • https://web.archive.org/web/20110421033625/http://www.newschool.edu/nssr/het/profiles/friedman.htm • https://web.archive.org/web/20111031071832/http://www.newschool.edu/nssr/het/essays/monetarism/mpolicy.htm • https://www.mtholyoke.edu/acad/intrel/depend.htm • https://web.archive.org/web/20110723182316/http://www.newschool.edu/nssr/het/profiles/prebisch.htm

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