Portal:Economics
Introduction
Economics (/ˌɛkəˈnɒmɪks, ˌiːkə-/) is a social science that studies the production, distribution, and consumption of goods and services.
Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyses what is viewed as basic elements within economies, including individual agents and markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings, and investment expenditure interact; and the factors of production affecting them, such as: labour, capital, land, and enterprise, inflation, economic growth, and public policies that impact these elements. It also seeks to analyse and describe the global economy. (Full article...)
Selected general articles
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![Image 1 Schumpeter in 1945 Joseph Alois Schumpeter (German: [ˈʃʊmpeːtɐ]; February 8, 1883 – January 8, 1950) was an Austrian political economist. He served briefly as Finance Minister of Austria in 1919. In 1932, he emigrated to the United States to become a professor at Harvard University, where he remained until the end of his career, and in 1939 obtained American citizenship. Schumpeter was one of the most influential economists of the early 20th century, and popularized creative destruction, a term coined by Werner Sombart. His magnum opus is considered Capitalism, Socialism and Democracy. (Full article...)](https://upload.wikimedia.org/wikipedia/en/d/d2/Blank.png)
Joseph Alois Schumpeter (German: [ˈʃʊmpeːtɐ]; February 8, 1883 – January 8, 1950) was an Austrian political economist. He served briefly as Finance Minister of Austria in 1919. In 1932, he emigrated to the United States to become a professor at Harvard University, where he remained until the end of his career, and in 1939 obtained American citizenship.
Schumpeter was one of the most influential economists of the early 20th century, and popularized creative destruction, a term coined by Werner Sombart. His magnum opus is considered Capitalism, Socialism and Democracy. (Full article...) -
Microeconomics analyzes the market mechanisms that enable buyers and sellers to establish relative prices among goods and services. Shown is a marketplace in Delhi.
Microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms. Microeconomics focuses on the study of individual markets, sectors, or industries as opposed to the economy as a whole, which is studied in macroeconomics.
One goal of microeconomics is to analyze the market mechanisms that establish relative prices among goods and services and allocate limited resources among alternative uses. Microeconomics shows conditions under which free markets lead to desirable allocations. It also analyzes market failure, where markets fail to produce efficient results. (Full article...) -
Friedrich August von Hayek CH FBA (8 May 1899 – 23 March 1992) was an Austrian-born British academic and philosopher. He is known for his contributions to political economy, political philosophy and intellectual history. Hayek shared the 1974 Nobel Memorial Prize in Economic Sciences with Gunnar Myrdal for work on money and economic fluctuations, and the interdependence of economic, social and institutional phenomena. His account of how prices communicate information is widely regarded as an important contribution to economics that led to him receiving the prize. He was a major contributor to the Austrian school of economics.
During his teenage years, Hayek fought in World War I. He later said this experience, coupled with his desire to help avoid the mistakes that led to the war, drew him into economics. He earned doctoral degrees in law in 1921 and political studies in 1923 from the University of Vienna. He subsequently lived and worked in Austria, Great Britain, the United States and Germany. He became a British national in 1938. He studied and taught at the London School of Economics and later at the University of Chicago, before returning to Europe late in life to teach at the Universities of Salzburg and Freiburg. (Full article...) -
Irving Fisher (February 27, 1867 – April 29, 1947) was an American economist, statistician, inventor, eugenicist and progressive social campaigner. He was one of the earliest American neoclassical economists, though his later work on debt deflation has been embraced by the post-Keynesian school. Joseph Schumpeter described him as "the greatest economist the United States has ever produced", an assessment later repeated by James Tobin and Milton Friedman.
Fisher made important contributions to utility theory and general equilibrium. He was also a pioneer in the rigorous study of intertemporal choice in markets, which led him to develop a theory of capital and interest rates. His research on the quantity theory of money inaugurated the school of macroeconomic thought known as "monetarism". Fisher was also a pioneer of econometrics, including the development of index numbers. Some concepts named after him include the Fisher equation, the Fisher hypothesis, the international Fisher effect, the Fisher separation theorem and Fisher market. (Full article...) -
Econometrics is an application of statistical methods to economic data in order to give empirical content to economic relationships. More precisely, it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference." An introductory economics textbook describes econometrics as allowing economists "to sift through mountains of data to extract simple relationships." Jan Tinbergen is one of the two founding fathers of econometrics. The other, Ragnar Frisch, also coined the term in the sense in which it is used today.
A basic tool for econometrics is the multiple linear regression model. Econometric theory uses statistical theory and mathematical statistics to evaluate and develop econometric methods. Econometricians try to find estimators that have desirable statistical properties including unbiasedness, efficiency, and consistency. Applied econometrics uses theoretical econometrics and real-world data for assessing economic theories, developing econometric models, analysing economic history, and forecasting. (Full article...) -
Joan Violet Robinson FBA (née Maurice; 31 October 1903 – 5 August 1983) was a British economist known for her wide-ranging contributions to economic theory. One of the most prominent economists of the century, Robinson incarnated the "Cambridge School" in most of its guises in the 20th century. She started out as a Marshallian, became one of the earliest and most ardent Keynesians after 1936, and ended up as a leader of the neo-Ricardian and post-Keynesian schools. (Full article...) -
Modern monetary theory or modern money theory (MMT) is a heterodox macroeconomic theory that describes currency as a public monopoly and unemployment as evidence that a currency monopolist is overly restricting the supply of the financial assets needed to pay taxes and satisfy savings desires. According to MMT, governments do not need to worry about accumulating debt since they can pay interest by printing money. MMT argues that the primary risk once the economy reaches full employment is inflation, which acts as the only constraint on spending. MMT also argues that inflation can be controlled by increasing taxes on everyone, to reduce the spending capacity of the private sector.[verification needed]
MMT is opposed to the mainstream understanding of macroeconomic theory and has been criticized heavily by many mainstream economists. MMT is also strongly opposed by members of the Austrian school of economics. (Full article...) -
Supply-side economics is a macroeconomic theory postulating that economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade. According to supply-side economics theory, consumers will benefit from greater supply of goods and services at lower prices, and employment will increase. Supply-side fiscal policies are designed to increase aggregate supply, as opposed to aggregate demand, thereby expanding output and employment while lowering prices. Such policies are of several general varieties:
- Investments in human capital, such as education, healthcare, and encouraging the transfer of technologies and business processes, to improve productivity (output per worker). Encouraging globalized free trade via containerization is a major recent example.
- Tax reduction, to provide incentives to work, invest and take risks. Lowering income tax rates and eliminating or lowering tariffs are examples of such policies.
- Investments in new capital equipment and research and development (R&D), to further improve productivity. Allowing businesses to depreciate capital equipment more rapidly (e.g., over one year as opposed to 10) gives them an immediate financial incentive to invest in such equipment.
- Reduction in government regulations, to encourage business formation and expansion.
A basis of supply-side economics is the Laffer curve, a theoretical relationship between rates of taxation and government revenue. The Laffer curve suggests that when the tax level is too high, lowering tax rates will boost government revenue through higher economic growth, though the level at which rates are deemed "too high" is disputed. Critics also argue that several large tax cuts in the United States over the last 40 years have not increased revenue. (Full article...) -
The Austrian school is a heterodox school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result primarily from the motivations and actions of individuals along with their self interest. Austrian-school theorists hold that economic theory should be exclusively derived from basic principles of human action.
The Austrian school originated in 1871 in Vienna with the work of Carl Menger, Eugen von Böhm-Bawerk, Friedrich von Wieser, and others. It was methodologically opposed to the Historical school, in a dispute known as Methodenstreit, or methodology quarrel. Current-day economists working in this tradition are located in many countries, but their work is still referred to as Austrian economics. Among the theoretical contributions of the early years of the Austrian school are the subjective theory of value, marginalism in price theory and the formulation of the economic calculation problem. (Full article...) -
Antoine Augustin Cournot (French: [ɑ̃twan oɡystɛ̃ kuʁno]; 28 August 1801 – 31 March 1877) was a French philosopher and mathematician who contributed to the development of economics. (Full article...) -
Piero Sraffa FBA (5 August 1898 – 3 September 1983) was an influential Italian political economist who served as lecturer of economics at the University of Cambridge. His book Production of Commodities by Means of Commodities is taken as founding the neo-Ricardian school of economics. (Full article...) -
Eli Filip Heckscher (24 November 1879 – 23 December 1952) was a Swedish political economist and economic historian who was a professor at the Stockholm School of Economics.
He is known for the Heckscher–Ohlin theorem, an influential model of international trade that predicts that capital-abundant countries export capital-intensive goods, while labor-abundant countries export the labor-intensive goods. (Full article...) -
David Ricardo (18 April 1772 – 11 September 1823) was a British political economist, politician, and member of Parliament. He is recognized as one of the most influential classical economists, alongside figures such as Thomas Malthus, Adam Smith and James Mill.
Ricardo was born in London as the third surviving child of a successful stockbroker and his wife. He came from a Sephardic Jewish family of Portuguese origin. At 21, he eloped with a Quaker and converted to Unitarianism, causing estrangement from his family. He made his fortune financing government borrowing and later retired to an estate in Gloucestershire. Ricardo served as High Sheriff of Gloucestershire and bought a seat in Parliament as an earnest reformer. He was friends with prominent figures like James Mill, Jeremy Bentham, and Thomas Malthus, engaging in debates over various topics. Ricardo was also a member of The Geological Society, and his youngest sister was an author. (Full article...) -
Richard H. Thaler (/ˈθeɪlər/; born September 12, 1945) is an American economist and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. In 2015, Thaler was president of the American Economic Association.
Thaler is a theorist in behavioral economics who has collaborated with Daniel Kahneman, Amos Tversky, and others in further defining that field. In 2018, he was elected a member in the National Academy of Sciences. (Full article...) -
The attention economy refers to the incentives of advertising-driven companies, in particular, to maximize the time and attention their users give to their product.
Attention economics is an approach to the management of information that treats human attention as a scarce commodity and applies economic theory to solve various information management problems. (Full article...) -
Microeconomics analyzes the market mechanisms that enable buyers and sellers to establish relative prices among goods and services. Shown is a marketplace in Delhi.
Microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms. Microeconomics focuses on the study of individual markets, sectors, or industries as opposed to the economy as a whole, which is studied in macroeconomics.
One goal of microeconomics is to analyze the market mechanisms that establish relative prices among goods and services and allocate limited resources among alternative uses. Microeconomics shows conditions under which free markets lead to desirable allocations. It also analyzes market failure, where markets fail to produce efficient results. (Full article...) -
John Kenneth Galbraith OC (October 15, 1908 – April 29, 2006), also known as Ken Galbraith, was a Canadian-American economist, diplomat, public official, and intellectual. His books on economic topics were bestsellers from the 1950s through the 2000s. As an economist, he leaned toward post-Keynesian economics from an institutionalist perspective. He served as the deputy director of the powerful Office of Price Administration (OPA) during World War II in charge of stabilizing all prices, wages and rents in the American economy, to combat the threat of inflation and hoarding during a time of shortages and rationing, a task which was successfully accomplished.
Galbraith was a long-time Harvard faculty member and stayed with Harvard University for half a century as a professor of economics. He was a prolific author and wrote four dozen books, including several novels, and published more than a thousand articles and essays on various subjects. Among his works was a trilogy on economics, American Capitalism (1952), The Affluent Society (1958), and The New Industrial State (1967). (Full article...) -
Mainstream economics is the body of knowledge, theories, and models of economics, as taught by universities worldwide, that are generally accepted by economists as a basis for discussion. Also known as orthodox economics, it can be contrasted to heterodox economics, which encompasses various schools or approaches that are only accepted by a small minority of economists.
The economics profession has traditionally been associated with neoclassical economics. However, this association has been challenged by prominent historians of economic thought including David Colander. They argue the current economic mainstream theories, such as game theory, behavioral economics, industrial organization, information economics, and the like, share very little common ground with the initial axioms of neoclassical economics. (Full article...) -
Real business-cycle theory (RBC theory) is a class of new classical macroeconomics models in which business-cycle fluctuations are accounted for by real, in contrast to nominal, shocks. RBC theory sees business cycle fluctuations as the efficient response to exogenous changes in the real economic environment. That is, the level of national output necessarily maximizes expected utility.
In RBC models, business cycles are described as "real" because they reflect optimal adjustments by economic agents rather than failures of markets to clear. As a result, RBC theory suggests that governments should concentrate on long-term structural change rather than intervention through discretionary fiscal or monetary policy. These ideas are strongly associated with freshwater economics within the neoclassical economics tradition, particularly the Chicago School of Economics. (Full article...) -
Bernard Mandeville, or Bernard de Mandeville (/ˈmændəˌvɪl/; 15 November 1670 – 21 January 1733), was an Anglo-Dutch philosopher, political economist, satirist, writer and physician. Born in Rotterdam, he lived most of his life in England and used English for most of his published works. He became famous for The Fable of the Bees. (Full article...) -
John Bates Clark (January 26, 1847 – March 21, 1938) was an American neoclassical economist. He was one of the pioneers of the marginalist revolution and opponent to the Institutionalist school of economics, and spent most of his career as a professor at Columbia University. He was one of the most prominent American economists of his time. (Full article...) -
Heterodox economics family tree.
Heterodox economics is a broad, relative term referring to schools of economic thought which are not commonly perceived as belonging to mainstream economics. There is no absolute definition of what constitutes heterodox economic thought, as it is defined in contrast to the most prominent, influential or popular schools of thought in a given time and place.
Groups typically classed as heterodox in current discourse include the Austrian, ecological, Marxist-historical, post-Keynesian, and modern monetary approaches. (Full article...) -
From a legal point of view, a contract is an institutional arrangement for the way in which resources flow, which defines the various relationships between the parties to a transaction or limits the rights and obligations of the parties.
From an economic perspective, contract theory studies how economic actors can and do construct contractual arrangements, generally in the presence of information asymmetry. Because of its connections with both agency and incentives, contract theory is often categorized within a field known as law and economics. One prominent application of it is the design of optimal schemes of managerial compensation. In the field of economics, the first formal treatment of this topic was given by Kenneth Arrow in the 1960s. In 2016, Oliver Hart and Bengt R. Holmström both received the Nobel Memorial Prize in Economic Sciences for their work on contract theory, covering many topics from CEO pay to privatizations. Holmström focused more on the connection between incentives and risk, while Hart on the unpredictability of the future that creates holes in contracts. (Full article...) -
Hermann Heinrich Gossen (7 September 1810 – 13 February 1858) was a German economist who is often regarded as the first to elaborate, in detail, a general theory of marginal utility.
Prior to Gossen, a number of economic theorists, including Gabriel Cramer, Daniel Bernoulli, William Forster Lloyd, Nassau William Senior, and Jules Dupuit had employed or asserted the significance of some notion of marginal utility. But Cramer, Bernoulli, and Dupuit had focussed upon specific problems, Lloyd had not presented any applications of theory, and if Senior provided a detailed elaboration of the general theory he had developed, he had done so in language that caused his applications of theory to be missed by most readers. (Full article...) -
Thermoeconomics, also referred to as biophysical economics, is a school of heterodox economics that applies the laws of statistical mechanics to economic theory. Thermoeconomics can be thought of as the statistical physics of economic value and is a subfield of econophysics.
It is the study of the ways and means by which human societies procure and use energy and other biological and physical resources to produce, distribute, consume and exchange goods and services, while generating various types of waste and environmental impacts. Biophysical economics builds on both social sciences and natural sciences to overcome some of the most fundamental limitations and blind spots of conventional economics. It makes it possible to understand some key requirements and framework conditions for economic growth, as well as related constraints and boundaries. (Full article...)
![Image 1 Schumpeter in 1945 Joseph Alois Schumpeter (German: [ˈʃʊmpeːtɐ]; February 8, 1883 – January 8, 1950) was an Austrian political economist. He served briefly as Finance Minister of Austria in 1919. In 1932, he emigrated to the United States to become a professor at Harvard University, where he remained until the end of his career, and in 1939 obtained American citizenship. Schumpeter was one of the most influential economists of the early 20th century, and popularized creative destruction, a term coined by Werner Sombart. His magnum opus is considered Capitalism, Socialism and Democracy. (Full article...)](https://www.tiosam.com/estados-unidos/florida/conheca-walt-disney-world/?rdp_we_resource=https%3A%2F%2Fen.wikipedia.org%2Fwiki%2FFile%3ABlank.png)
Did you know...
- ... that Elizabeth Wilkins chose to work at the Federal Trade Commission on the hope that the agency is now positioned to address economic injustice?
- ... that the 1983 Spanish floods were the most economically damaging in Spain until the 2024 Spanish floods?
- ... that scientists from the Institutum Divi Thomae raised silkworms at Saint Gregory Seminary during World War II as a form of economic warfare against Japan?
- ... that the Canadian journalist Bernard Descôteaux is credited with the economic revival of the independent newspaper Le Devoir?
- ... that Celine-Marie Pascale's work focuses on how race and class impact the way "business practices and government policies create, normalize and entrench economic struggles" to benefit the wealthy?
- ... that Michael Kremer's O-ring theory of economic development was inspired by his forgetting to purchase toilet paper for a training session?
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Selected images
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São Paulo Stock Exchange in Brazil, an electronic trading network that brings together buyers and sellers through an electronic trading platform -
List of countries by gross domestic product (PPP) per capita in April 2022 (from Economics) -
Economists study trade, production, and consumption decisions, including those that occur in a traditional marketplace -
A 1638 painting of a French seaport during the heyday of mercantilism -
John Maynard Keynes, a key economics theorist (from Economics) -
The supply and demand model describes how prices vary as a result of a balance between product availability and demand. The graph depicts an increase in demand from D1 to D2 and the resulting increase in price and quantity required to reach a new equilibrium point on the supply curve (S). -
A basic illustration of a business cycle (from Economics) -
Pollution can be a simple example of market failure; if costs of production are not borne by producers but are by the environment, accident victims or others, then prices are distorted. -
The publication of Adam Smith's The Wealth of Nations in 1776 is considered to be the first formalisation of economic thought. -
An environmental scientist sampling water -
The U.S. unemployment rate from 1990 to 2022 (from Economics) -
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An example production–possibility frontier with illustrative points marked (from Economics)
In the news
- 25 April 2025 – German economic crisis
- The German government cuts its economic growth forecast to zero, with the Deutsche Bundesbank estimating a future recession. Minister of Economic Affairs Robert Habeck accuses U.S. President Donald Trump's Liberation Day tariffs of being the primary reason for Germany's continued economic crisis. (DW)
- 11 April 2025 – Tariffs in the second Trump administration
- China states that it will not respond to any further U.S. tariff increases, as U.S. goods have already been priced out of the Chinese market by existing tariffs, but may still impose other economic measures. (CNBC)
- 7 April 2025 – Tariffs in the second Trump administration, Executive orders in the second presidency of Donald Trump
- European Commission president Ursula von der Leyen offers to negotiate with Trump to avoid a trade war and further economic panic, including a zero-for-zero tariff deal on all industrial goods. (Politico) (Euronews)
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