Modern economic theories within the framework of economic science

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:40

Economic theory is one of the most important disciplines of economics. Within its framework, philosophical and theoretical postulates are set, a comprehensive study of the market takes place. In a narrow sense, the concept of economic theory implies a set of principles that help choose the most effective ways to meet unlimited needs with limited resources. In other words, this is global management, which includes many schools and trends.

Science takes its origins in the third century BC in a number of countries of the Ancient East. The "Laws of Manu" of ancient India can be considered an ancient monument of economic thought. Plato and Aristotle gave a strong impetus to development. Divided and supplemented the scientific thought of ancient Greek philosophers in Ancient Rome.

One of the main methods of science is graphical modeling, that is, economic theories carry various models that seek to explain a particular process. A large role is given to forecasting, the ability to predict the course of global economic processes often determines the viability of a particular doctrine.

Economic theories are also actively used todeveloping practical recommendations for:

• lower inflation;
• GDP growth;
• cost optimization;
• development of individual industries.

This science is dynamic, within its framework new economic theories constantly appear and old ones are supplemented. This inevitable process is associated with regular changes in the market. The history of economic doctrines is called upon to track and analyze such changes through a historical prism.

In a global sense, all economic theories set themselves the task of most accurately conveying the real economy, explaining changes and deviations.

Modern Economic Theories:

• Neo-Keynesianism is a teaching of the macroeconomic school based on the works of John Keynes.
• Monetarism is a macroeconomic doctrine that considers the cornerstone of the economy the amount of money in circulation. Nobel laureate Milton Friedman laid the foundation for the theory.
• New institutional theory is a doctrine that analyzes social institutions through the prism of economic theory. Often confused with institutionalism, but there is no direct connection between these teachings.
• The Austrian school (aka Vienna, Psychological) is a direction that upholds the principles of economic liberalism: freedom of terms of transactions, minimizing government intervention in the economy. According to the approach of the Vienna School, the economy is an extremely difficult object for analysis (the question is raised about the possibilityreal prediction) due to the many determinants and the complex nature of human economic behavior.
• The New Political Economy is one of the most researched doctrines in the framework of modern economic theory, analyzing the behavioral mechanisms of politicians, officials, the media and the electorate through the prism of the market and the economy. Within its framework, there is a rejection of the concept of an “ideal state”, which is designed to take care of citizens. This theory implies that the contradictions between the participants in this process are the cause of corruption.