Schools of Thought in Economics

Topics: Economics, Supply and demand, Inflation Pages: 1 (353 words) Published: September 9, 2013
Comparison of the Six Schools of Thought in Economics

Categories| Mercantilism| Physiocracy| Classical| Socialism| Neoclassical| Keynesian| Monetarist| Market view| Monopolizing markets.| There should be less government intervention.| Market should be self-regulating and resources are efficiently distributed by the “invisible hand”.| Competition is evil, market is bad.| Studied equilibrium and market should be self-regulating or self-correcting| Market failures came about during hard times, government should intervene by spending.| Distortions in the market are brought about by the disturbance of money supply and not by saving money.| Wealth| Through the amount of gold a nation possess| Rome from agriculture and not from trade| The yearly national income, instead of the king's treasury| Laborers will create their government and distribute wealth to them| Maximization of utility and profit.| During recessions, economic output is strongly influenced by aggregate demand| The demand for money is a stable function of wealth, prices, price changes and interest.| Price and value determination| The nobility dictates the price and value.| Solely from the value of “land agriculture” or “land development”| Amount of labor input. The value of a good is equivalent to the cost of producing it.| Lack of price signals and free price system.| Market price reflects interaction between supply and demand.| Result of a sequential and evolving process driven by the force of the entrepreneurial function| Variation in the money supply.| State/Government behavior| State should act like a merchant.| Less government intervention| Nations which trade are better off.| Government employs, government pays according to one’s ability and needs| Maximize profits| Government should intervene through spending when market fails| Government should a lot as an agent of the people and not a giver of benefit| People’s behavior| Follows the rules of the...
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