HISTORY OF ECONOMIC THOUGHT - PLATO
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Plato was a Greek philosopher who wrote The Republic, one of the first works of political philosophy. In The Republic, Plato argues that the ideal government should be led by philosophers. Plato believed that the division of labor was the basis for social organization and that natural inequalities among humans led to specialization of tasks. He proposed an ideal social structure divided into two classes - rulers who were educated in philosophy and warfare, and ruled artisans who engaged in production. The rulers would not possess private property.
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HISTORY OF ECONOMIC THOUGHT - ARISTOTLE
Aristotle was a Greek philosopher and economist who made many contributions to early economic thought. He believed that the production of goods to satisfy natural needs was justified, but producing goods to satisfy unlimited desires was unnatural. Aristotle recognized the functions of money as a medium of exchange, store of value, and measure of value. He supported private property but was against interest and monopoly. Overall, Aristotle laid important foundations for concepts like value, exchange, money, and the justification of economic activity that influenced later economic thinkers.
History of Economic Thought
The document discusses ancient economic thought from the Hebrews and Greeks. It provides an overview of key economic ideas from these early civilizations, including Plato's concept of the ideal state. For the Hebrews, it outlines their simple economic philosophy and notes characteristics like a lack of individualism. For the Greeks, it examines Plato's view of the division of labor and origin of the city-state. Plato proposed a rigid social hierarchy and strict regulation of all activities in his ideal state. The summary then focuses on specific aspects of Plato's ideal state model, including his concept of money, interest, and regulated trade and commerce.
HISTORY OF ECONOMIC THOUGHT - MEDIEVAL ECONOMIC THOUGHT
The document provides an overview of medieval economic thought from the 5th to 15th centuries in Europe. Key aspects discussed include:
- Society was organized in a feudal system with people enjoying status according to rank.
- Christianity had a major influence, teaching universal brotherhood and challenging the institution of slavery.
- Figures like St. Thomas Aquinas emphasized concepts like just price, private property for common good, and permissible interest under certain conditions based on Aristotle and the Bible.
HISTORY OF ECONOMIC THOUGHT - GREEKS
The ancient Greeks made major achievements in philosophy, literature, art, architecture, and the development of economics as a field of study. They were pioneers in democratic government and established many cultural institutions still important today. Some key Greek innovations included establishing the first universities, developing astronomy and mathematics, holding the first Olympic games, and advances in architecture like temples with columns. Greek society was dominated by free citizens and slave labor, with education primarily for wealthy males. Their intellectual legacy has profoundly shaped Western thought and culture over 2000 years later.
Main ideas of physiocrats
The Physiocrats contributed three important economic ideas: the concept of natural order, the concept of net product, and the circulation of wealth. They viewed natural order as the providential system established by God for humanity's welfare. They believed agriculture was the sole source of wealth and that it was the only productive sector, producing a net product (surplus). This net product was distributed through the economy via the circulation of wealth among the three classes of society: the productive agricultural class, the proprietary landowning class, and the sterile/unproductive non-agricultural class. Quesnay illustrated this circulation through his Tableau Economique, demonstrating how wealth originates from agriculture and circulates through the classes.
History of economic thought
What is history of Economic Thought
Why study History of Economic Thought
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Classical economic thought
The document discusses several key concepts in classical economics:
1. Classical economics included a value theory and distribution theory where the value of a product depended on production costs. Distribution of income was explained by costs of production.
2. Under classical economics, a landlord received rent, workers received wages, and capitalist tenants received profits from their investments.
3. Adam Smith was a prominent figure in classical economics and argued that labor is the source of a country's wealth and wealth increases through division of labor and free competition.
4. Physiocrats believed that agriculture was the sole source of wealth for a nation. Rent, wages, and profits were seen as distributions of the agricultural surplus.
Arrows Impossibility Theorem.pptx
Arrow's Impossibility Theorem demonstrates that it is impossible to create a social welfare function that aggregates individual preferences into a collective social preference in a consistent, democratic manner when there are 3 or more alternatives. Arrow identified 5 criteria that any social welfare system should satisfy: collective rationality, responsiveness to individual preferences, non-imposition, non-dictatorship, and independence of irrelevant alternatives. However, his theorem showed that no voting system can simultaneously satisfy all 5 criteria. This finding challenged the notion that majority-rule voting can consistently translate individual preferences into a social ranking.
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HISTORY OF ECONOMIC THOUGHT - ARISTOTLE
Aristotle was a Greek philosopher and economist who made many contributions to early economic thought. He believed that the production of goods to satisfy natural needs was justified, but producing goods to satisfy unlimited desires was unnatural. Aristotle recognized the functions of money as a medium of exchange, store of value, and measure of value. He supported private property but was against interest and monopoly. Overall, Aristotle laid important foundations for concepts like value, exchange, money, and the justification of economic activity that influenced later economic thinkers.
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HISTORY OF ECONOMIC THOUGHT - MEDIEVAL ECONOMIC THOUGHT
The document provides an overview of medieval economic thought from the 5th to 15th centuries in Europe. Key aspects discussed include:
- Society was organized in a feudal system with people enjoying status according to rank.
- Christianity had a major influence, teaching universal brotherhood and challenging the institution of slavery.
- Figures like St. Thomas Aquinas emphasized concepts like just price, private property for common good, and permissible interest under certain conditions based on Aristotle and the Bible.
HISTORY OF ECONOMIC THOUGHT - GREEKS
The ancient Greeks made major achievements in philosophy, literature, art, architecture, and the development of economics as a field of study. They were pioneers in democratic government and established many cultural institutions still important today. Some key Greek innovations included establishing the first universities, developing astronomy and mathematics, holding the first Olympic games, and advances in architecture like temples with columns. Greek society was dominated by free citizens and slave labor, with education primarily for wealthy males. Their intellectual legacy has profoundly shaped Western thought and culture over 2000 years later.
Main ideas of physiocrats
The Physiocrats contributed three important economic ideas: the concept of natural order, the concept of net product, and the circulation of wealth. They viewed natural order as the providential system established by God for humanity's welfare. They believed agriculture was the sole source of wealth and that it was the only productive sector, producing a net product (surplus). This net product was distributed through the economy via the circulation of wealth among the three classes of society: the productive agricultural class, the proprietary landowning class, and the sterile/unproductive non-agricultural class. Quesnay illustrated this circulation through his Tableau Economique, demonstrating how wealth originates from agriculture and circulates through the classes.
History of economic thought
What is history of Economic Thought
Why study History of Economic Thought
Three General Beliefs in the study of History of Economic Thought
History of Economic Thought Vs Economic Thought
Period /Timeline of History of Economic Thought
Classical economic thought
The document discusses several key concepts in classical economics:
1. Classical economics included a value theory and distribution theory where the value of a product depended on production costs. Distribution of income was explained by costs of production.
2. Under classical economics, a landlord received rent, workers received wages, and capitalist tenants received profits from their investments.
3. Adam Smith was a prominent figure in classical economics and argued that labor is the source of a country's wealth and wealth increases through division of labor and free competition.
4. Physiocrats believed that agriculture was the sole source of wealth for a nation. Rent, wages, and profits were seen as distributions of the agricultural surplus.
Arrows Impossibility Theorem.pptx
Arrow's Impossibility Theorem demonstrates that it is impossible to create a social welfare function that aggregates individual preferences into a collective social preference in a consistent, democratic manner when there are 3 or more alternatives. Arrow identified 5 criteria that any social welfare system should satisfy: collective rationality, responsiveness to individual preferences, non-imposition, non-dictatorship, and independence of irrelevant alternatives. However, his theorem showed that no voting system can simultaneously satisfy all 5 criteria. This finding challenged the notion that majority-rule voting can consistently translate individual preferences into a social ranking.
Pareto optimality
The document discusses general equilibrium theory and its key assumptions and implications. It addresses the following points in 3 sentences:
General equilibrium theory posits that all markets, including both product and factor markets, will reach equilibrium simultaneously. This equilibrium will be Pareto optimal, meaning no individual can be made better off without making another worse off due to optimal resource allocation. The model assumes perfect competition, constant returns to scale, and that equilibrium is determined by price adjustments across interconnected markets.
Classical
Adam Smith is considered the founder of classical economics. In his seminal work "The Wealth of Nations" published in 1776, he outlined several key ideas:
1) He argued that an "invisible hand" in the free market leads to economic prosperity as individuals pursuing their self-interest ultimately benefit society as a whole.
2) He believed that free trade and minimal government intervention are ideal.
3) He explained that division of labor increases productivity and specialization, and is limited by the extent of the market. Wider markets allow for more division of labor.
4) Smith analyzed factors of production including wages, profit, rent and their relationships in a market economy. He believed competition would
Physiocarcy
Physiocracy was an economic theory developed in 18th century France that viewed agriculture as the sole source of wealth. Key aspects of Physiocracy included the belief that there is a natural order to the economy governed by natural laws. Agriculture was seen as the only productive sector that created surplus value, while other sectors like manufacturing were seen as sterile. Physiocrats advocated for minimal government intervention, free trade, and a single tax on net agricultural product. Their theories were presented through François Quesnay's Economic Table, which modeled circular cash flows between landowners, farmers, and other classes.
The Social welfare function
This document discusses Samuelson's social welfare function approach to welfare economics. It introduces key concepts like Pareto optimality, social indifference curves, utility possibility curves, and the grand utility possibility frontier. The key point is that Samuelson's model finds a unique point of constrained bliss where social welfare is maximized, taking into account both individual utility levels and aggregate production possibilities. This point satisfies efficiency conditions and maximizes the social welfare function subject to resource constraints.
Adam smith value theory
Adam Smith's theory of value analyzed what regulates exchange values and the elements that govern the exchange value of commodities. He distinguished between value in use, based on a good's utility, and value in exchange. While essential goods like water have value in use, they have no value in exchange. In contrast, diamonds have value in exchange but are not essential. Smith believed for a commodity to have value in exchange it must first have value in use, and it must also be relatively scarce. He argued that in a simple economy without other factors, the labor required to produce goods determines their relative values and rates of exchange. However, he acknowledged this does not hold when considering capital and land.
3.2.1 welfare economics
1) Welfare economics is concerned with measuring living standards and utility. It uses Pareto efficiency as a standard to determine if a resource allocation is efficient.
2) For an allocation to be Pareto efficient, it must satisfy three conditions: efficiency in consumption, efficiency in production, and product-mix efficiency.
3) A social welfare function can be used to rank different allocations and determine the allocation that provides the highest overall welfare. Utilitarian and Rawlsian approaches provide different forms for the social welfare function.
David ricardo
David Ricardo (1772-1823) was a British economist who developed theories such as the labor theory of value, comparative advantage, and rent. Some key points about Ricardo's theories include:
- He believed labor determines the long-run price of goods and that international trade benefits both countries based on their comparative advantages in production.
- Ricardo's theory of rent argued that landlords receive economic rent determined by crop prices rather than influencing prices themselves.
- He incorporated Malthus' theory of population growth relative to food supply into his "Iron Law of Wages," which stated wages long-run remain at subsistence level.
Economic Ideas of Kautilya
Kautilya was an Indian teacher, philosopher, economist and royal advisor from ancient India. He is considered the pioneer of political science and economics in India. His book Arthashastra discusses in detail the political, social, economic and military organization of the Mauryan Empire. It covers topics like public finance, taxation, trade, agriculture, labour and welfare. Kautilya advocated for a strong role of the state in the economy through industries, trade, agriculture and providing welfare. He emphasized wealth creation and its equitable distribution through a just system of taxation and wages.
Theory of growth
Adam Smith is considered the Father of Economics. In his seminal book, The Wealth of Nations, he argued that a country's wealth comes from the total value of goods and services produced, not just gold or agriculture. Smith identified two key drivers of economic growth: the division of labor and capital accumulation. The division of labor leads to specialization and higher productivity, while capital accumulation raises productivity by increasing capital per worker. This starts a virtuous cycle of growth, but eventually diminishing returns set in and growth slows, reaching a stationary state.
David ricardo
This document summarizes David Ricardo's theory of economics development known as Ricardian theory. It discusses Ricardo's background and key contributions, including the law of comparative advantage. It then outlines the assumptions of Ricardian theory, including diminishing returns to land and inelastic demand for corn. Ricardo's theory explains how total output is distributed as rent, profits, and wages. It also discusses how capital accumulation, wages, international trade, and criticisms of the theory relate to Ricardian economics.
Classical model of employment
Main features of the Classical theory of employment and income. Automatic equilibrium achievement of the market.
Theories of economic development
The classical growth theory argues that economic growth will decrease or end because of an increasing population and limited resources Classical growth theory economists believed that temporary increases in real GDP per person would cause a population explosion that would consequently decrease real GDP.
Theory of the second best
In economics, the theory of the second best concerns the situation when one or more optimality conditions cannot be satisfied.
The economists Richard Lipsey and Kelvin Lancaster showed in 1956, that if one optimality condition in an economic model cannot be satisfied, it is possible that the next-best solution involves changing other variables away from the values that would otherwise be optimal.
Politically, the theory implies that if it is infeasible to remove a particular market distortion, introducing a second (or more) market distortion may partially counteract the first, and lead to a more efficient outcome.
J.b.say
Jean-Baptiste Say introduced several important economic concepts, including distinguishing between factors of production (land, labor, capital) and introducing the concept of the entrepreneur. He is best known for "Say's Law", which states that supply creates its own demand. Say's Law was an important idea in classical economics and implied that general overproduction was impossible. It was based on ideas that savings equal investment, and that people only hold money for transactions, not as an asset. While Say's Law may have been intended to describe an equilibrium condition, it was often interpreted as being true at all times, which many classical economists like Mill disagreed with.
HISTORY OF ECONOMIC THOUGHT - ROMAN
The Romans borrowed most of their economic ideas from the Greeks. They were primarily focused on expanding their vast empire through military power rather than developing original economic theories. While the Romans respected Greek intellectual and artistic achievements, they built upon Greek architecture to develop new solutions required to construct massive cities with high populations. During the decline of the Roman Empire, some philosophers began discussing economic topics and viewed money lending and luxury as harmful, instead favoring simplicity and small family farms. Roman law also established concepts still used in economics like private property, contracts, and definitions of price, money, and loans.
Classical theory of economics
Classical economics is a macroeconomic theory based on flexible prices, Say's law that supply creates its own demand, and equality between savings and investment. It traces back to Adam Smith and assumes markets clear naturally, leading to full employment. In contrast, Keynesian economics recognizes unemployment and a need for aggregate demand management by the government.
Bertrand competition presentation
This document explains the Bertrand model of competition using Coca-Cola and Pepsi as an example. The Bertrand model assumes that firms in an oligopoly compete on price rather than quantity. It describes how Joseph Bertrand improved upon the Cournot model by using price rather than quantity as the strategic variable. The model assumes firms produce differentiated products and set prices to maximize profits, resulting in an equilibrium price equal to marginal cost. However, the model makes unrealistic assumptions and may not accurately describe real-world oligopolistic competition between firms like Coke and Pepsi.
Model of endogenous growth the ak model
This document provides an overview of the AK model of endogenous economic growth. It discusses how the AK model addresses limitations of previous exogenous growth models. The key aspects of the AK model are:
- It models economic output as a linear function of capital stock, without diminishing returns to capital.
- This allows for perpetual long-run growth, unlike exogenous models which predict convergence to a steady state.
- The growth rate depends on savings rate and the level of technology, represented by the parameter A. Improvements in A can permanently increase the growth rate.
General equilibrium theory
1. The document discusses general equilibrium theory (GET) and defines general equilibrium as a state where all markets and decision-making units are in simultaneous equilibrium.
2. It presents a simple two-sector general equilibrium model of an economy with two consumers, two goods, and two factors of production. Equations represent consumer demand, factor supply, factor demand, good supply, and market clearing for goods and factors.
3. With the number of equations equal to the number of unknowns, a general equilibrium solution exists in this Walrasian model under certain assumptions. GET provides a framework for understanding the complexity of economic systems through interdependent markets.
Restatement of quantity theory of money
Milton Friedman proposed a restatement of the Quantity Theory of Money (QTM) that incorporated permanent real income and wealth. He argued that the demand for money depends on total wealth, expected returns on various assets, and tastes/preferences. Friedman defined permanent real income as the sustainable level of income without reducing wealth over time. His equation for the QTM included factors like the money stock, the price level, permanent income, expected rates of return on different assets, and other variables. While improving on prior theories, Friedman's restatement still had limitations like subjective terms that are hard to measure and challenges maintaining a steady money supply in a modern economy.
Scientific theory of state and society parities and disparities between the p...
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- Plato was an influential ancient Greek philosopher who founded the Academy in Athens, one of the earliest known institutions of higher learning in the Western world. He wrote dialogues on various topics, including politics, ethics, metaphysics, and aesthetics.
- Al-Farabi was an influential Muslim philosopher and scientist who was one of the major figures in the golden age of Islam. He incorporated Aristotelian and Neoplatonic thought into an Islamic philosophical framework. He proposed the idea of a virtuous city ruled by a wise philosopher-king and discussed the traits and functions of the ideal supreme ruler.
- Both Plato and Al-Farabi proposed ideal models of government and society ruled by philosopher-Economists (pt. 1)
The document provides biographical information on several influential historical economic thinkers from ancient times through the Middle Ages. It describes Fan Li and Chanakya from ancient China and India and their contributions to business principles. In ancient Greece, Xenophon wrote about household management. Plato and Aristotle discussed specialization of labor, money, and different forms of government. During the Middle Ages, the Church grew in power as feudalism developed. Scholastic philosophers like Thomas Aquinas and Duns Scotus analyzed the concept of a just price.
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The document discusses general equilibrium theory and its key assumptions and implications. It addresses the following points in 3 sentences:
General equilibrium theory posits that all markets, including both product and factor markets, will reach equilibrium simultaneously. This equilibrium will be Pareto optimal, meaning no individual can be made better off without making another worse off due to optimal resource allocation. The model assumes perfect competition, constant returns to scale, and that equilibrium is determined by price adjustments across interconnected markets.
Classical
Adam Smith is considered the founder of classical economics. In his seminal work "The Wealth of Nations" published in 1776, he outlined several key ideas:
1) He argued that an "invisible hand" in the free market leads to economic prosperity as individuals pursuing their self-interest ultimately benefit society as a whole.
2) He believed that free trade and minimal government intervention are ideal.
3) He explained that division of labor increases productivity and specialization, and is limited by the extent of the market. Wider markets allow for more division of labor.
4) Smith analyzed factors of production including wages, profit, rent and their relationships in a market economy. He believed competition would
Physiocarcy
Physiocracy was an economic theory developed in 18th century France that viewed agriculture as the sole source of wealth. Key aspects of Physiocracy included the belief that there is a natural order to the economy governed by natural laws. Agriculture was seen as the only productive sector that created surplus value, while other sectors like manufacturing were seen as sterile. Physiocrats advocated for minimal government intervention, free trade, and a single tax on net agricultural product. Their theories were presented through François Quesnay's Economic Table, which modeled circular cash flows between landowners, farmers, and other classes.
The Social welfare function
This document discusses Samuelson's social welfare function approach to welfare economics. It introduces key concepts like Pareto optimality, social indifference curves, utility possibility curves, and the grand utility possibility frontier. The key point is that Samuelson's model finds a unique point of constrained bliss where social welfare is maximized, taking into account both individual utility levels and aggregate production possibilities. This point satisfies efficiency conditions and maximizes the social welfare function subject to resource constraints.
Adam smith value theory
Adam Smith's theory of value analyzed what regulates exchange values and the elements that govern the exchange value of commodities. He distinguished between value in use, based on a good's utility, and value in exchange. While essential goods like water have value in use, they have no value in exchange. In contrast, diamonds have value in exchange but are not essential. Smith believed for a commodity to have value in exchange it must first have value in use, and it must also be relatively scarce. He argued that in a simple economy without other factors, the labor required to produce goods determines their relative values and rates of exchange. However, he acknowledged this does not hold when considering capital and land.
3.2.1 welfare economics
1) Welfare economics is concerned with measuring living standards and utility. It uses Pareto efficiency as a standard to determine if a resource allocation is efficient.
2) For an allocation to be Pareto efficient, it must satisfy three conditions: efficiency in consumption, efficiency in production, and product-mix efficiency.
3) A social welfare function can be used to rank different allocations and determine the allocation that provides the highest overall welfare. Utilitarian and Rawlsian approaches provide different forms for the social welfare function.
David ricardo
David Ricardo (1772-1823) was a British economist who developed theories such as the labor theory of value, comparative advantage, and rent. Some key points about Ricardo's theories include:
- He believed labor determines the long-run price of goods and that international trade benefits both countries based on their comparative advantages in production.
- Ricardo's theory of rent argued that landlords receive economic rent determined by crop prices rather than influencing prices themselves.
- He incorporated Malthus' theory of population growth relative to food supply into his "Iron Law of Wages," which stated wages long-run remain at subsistence level.
Economic Ideas of Kautilya
Kautilya was an Indian teacher, philosopher, economist and royal advisor from ancient India. He is considered the pioneer of political science and economics in India. His book Arthashastra discusses in detail the political, social, economic and military organization of the Mauryan Empire. It covers topics like public finance, taxation, trade, agriculture, labour and welfare. Kautilya advocated for a strong role of the state in the economy through industries, trade, agriculture and providing welfare. He emphasized wealth creation and its equitable distribution through a just system of taxation and wages.
Theory of growth
Adam Smith is considered the Father of Economics. In his seminal book, The Wealth of Nations, he argued that a country's wealth comes from the total value of goods and services produced, not just gold or agriculture. Smith identified two key drivers of economic growth: the division of labor and capital accumulation. The division of labor leads to specialization and higher productivity, while capital accumulation raises productivity by increasing capital per worker. This starts a virtuous cycle of growth, but eventually diminishing returns set in and growth slows, reaching a stationary state.
David ricardo
This document summarizes David Ricardo's theory of economics development known as Ricardian theory. It discusses Ricardo's background and key contributions, including the law of comparative advantage. It then outlines the assumptions of Ricardian theory, including diminishing returns to land and inelastic demand for corn. Ricardo's theory explains how total output is distributed as rent, profits, and wages. It also discusses how capital accumulation, wages, international trade, and criticisms of the theory relate to Ricardian economics.
Classical model of employment
Main features of the Classical theory of employment and income. Automatic equilibrium achievement of the market.
Theories of economic development
The classical growth theory argues that economic growth will decrease or end because of an increasing population and limited resources Classical growth theory economists believed that temporary increases in real GDP per person would cause a population explosion that would consequently decrease real GDP.
Theory of the second best
In economics, the theory of the second best concerns the situation when one or more optimality conditions cannot be satisfied.
The economists Richard Lipsey and Kelvin Lancaster showed in 1956, that if one optimality condition in an economic model cannot be satisfied, it is possible that the next-best solution involves changing other variables away from the values that would otherwise be optimal.
Politically, the theory implies that if it is infeasible to remove a particular market distortion, introducing a second (or more) market distortion may partially counteract the first, and lead to a more efficient outcome.
J.b.say
Jean-Baptiste Say introduced several important economic concepts, including distinguishing between factors of production (land, labor, capital) and introducing the concept of the entrepreneur. He is best known for "Say's Law", which states that supply creates its own demand. Say's Law was an important idea in classical economics and implied that general overproduction was impossible. It was based on ideas that savings equal investment, and that people only hold money for transactions, not as an asset. While Say's Law may have been intended to describe an equilibrium condition, it was often interpreted as being true at all times, which many classical economists like Mill disagreed with.
HISTORY OF ECONOMIC THOUGHT - ROMAN
The Romans borrowed most of their economic ideas from the Greeks. They were primarily focused on expanding their vast empire through military power rather than developing original economic theories. While the Romans respected Greek intellectual and artistic achievements, they built upon Greek architecture to develop new solutions required to construct massive cities with high populations. During the decline of the Roman Empire, some philosophers began discussing economic topics and viewed money lending and luxury as harmful, instead favoring simplicity and small family farms. Roman law also established concepts still used in economics like private property, contracts, and definitions of price, money, and loans.
Classical theory of economics
Classical economics is a macroeconomic theory based on flexible prices, Say's law that supply creates its own demand, and equality between savings and investment. It traces back to Adam Smith and assumes markets clear naturally, leading to full employment. In contrast, Keynesian economics recognizes unemployment and a need for aggregate demand management by the government.
Bertrand competition presentation
This document explains the Bertrand model of competition using Coca-Cola and Pepsi as an example. The Bertrand model assumes that firms in an oligopoly compete on price rather than quantity. It describes how Joseph Bertrand improved upon the Cournot model by using price rather than quantity as the strategic variable. The model assumes firms produce differentiated products and set prices to maximize profits, resulting in an equilibrium price equal to marginal cost. However, the model makes unrealistic assumptions and may not accurately describe real-world oligopolistic competition between firms like Coke and Pepsi.
Model of endogenous growth the ak model
This document provides an overview of the AK model of endogenous economic growth. It discusses how the AK model addresses limitations of previous exogenous growth models. The key aspects of the AK model are:
- It models economic output as a linear function of capital stock, without diminishing returns to capital.
- This allows for perpetual long-run growth, unlike exogenous models which predict convergence to a steady state.
- The growth rate depends on savings rate and the level of technology, represented by the parameter A. Improvements in A can permanently increase the growth rate.
General equilibrium theory
1. The document discusses general equilibrium theory (GET) and defines general equilibrium as a state where all markets and decision-making units are in simultaneous equilibrium.
2. It presents a simple two-sector general equilibrium model of an economy with two consumers, two goods, and two factors of production. Equations represent consumer demand, factor supply, factor demand, good supply, and market clearing for goods and factors.
3. With the number of equations equal to the number of unknowns, a general equilibrium solution exists in this Walrasian model under certain assumptions. GET provides a framework for understanding the complexity of economic systems through interdependent markets.
Restatement of quantity theory of money
Milton Friedman proposed a restatement of the Quantity Theory of Money (QTM) that incorporated permanent real income and wealth. He argued that the demand for money depends on total wealth, expected returns on various assets, and tastes/preferences. Friedman defined permanent real income as the sustainable level of income without reducing wealth over time. His equation for the QTM included factors like the money stock, the price level, permanent income, expected rates of return on different assets, and other variables. While improving on prior theories, Friedman's restatement still had limitations like subjective terms that are hard to measure and challenges maintaining a steady money supply in a modern economy.
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- Al-Farabi was an influential Muslim philosopher and scientist who was one of the major figures in the golden age of Islam. He incorporated Aristotelian and Neoplatonic thought into an Islamic philosophical framework. He proposed the idea of a virtuous city ruled by a wise philosopher-king and discussed the traits and functions of the ideal supreme ruler.
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Topic 3 - Aristotle
This document provides an overview of Aristotle and his political philosophy. Some key points:
- Aristotle studied under Plato and was concerned with why the Greek city-state declined as a form of government.
- His method involved studying many actual city-states to determine the "telos" or highest purpose of political communities.
- He viewed humans as rational and political animals who require community to achieve happiness. The ideal political community for humans is the polis or city-state.
- Aristotle analyzed different forms of government and constitutions, preferring a "polity" that mixes rule by the one, few and many to best serve the public interest over private interests.
4 main theories on the state
The pluralist theory of the state views the state as a neutral body that arbitrates between competing interests in society. It assumes power is dispersed among different interest groups that can influence state decisions. However, critics argue that some business interests are more influential and the state bureaucracy can also pursue its own interests. Marxist theory sees the capitalist state as maintaining class divisions by oppressing subordinate classes or elevating class conflict. Neo-Marxists revised Marx's ideas by considering additional factors like ideology and state power. Other theories examine how the state's role has changed with globalization and in developmental, social democratic, collectivized, and totalitarian states.
Society and Culture with Family Planning, HIV
This document provides an overview of a course on society and culture with family planning. It discusses the objectives of understanding human societies and social institutions from different sociological perspectives. It also covers the origins and development of human communities. The document then summarizes the philosophical theories of several thinkers on the formation of society, including Plato, Aristotle, Confucius, Machiavelli, More, Hobbes, Rousseau, Locke, and Mill. They discussed the purposes of government and ideals of just, harmonious societies based on principles like virtue, moral duty, laws, rights, and limiting state authority.
Topic 2 - Plato
Plato (427-347 BC) was a Greek philosopher who sought to address the injustice of Socrates' execution. In his works Republic, Statesman, and Laws, he explored questions of politics, justice, and the ideal state. Plato believed a just state requires a class structure with rulers governed by reason, guardians motivated by courage, and workers motivated by desires. The rulers' role is to understand the eternal Forms and implement justice by ensuring each class and individual performs the role suited to their nature. Plato's educational system was designed to produce a just state by training the ruling class in mathematics, astronomy, and philosophy to lead according to rational principles.
Karl Marx Major Contribution by Muhammad Saud
Muhammad Saud Kharal PhD in Social Science, Department of Sociology Faculty of Social and Political Sciences, Universitas Airlangga, Surabaya Indonesia
Economic Ideas of the Greeks.docx
This document summarizes the economic ideas of several ancient Greek philosophers. Plato believed the state originated to satisfy human needs and established classes of rulers and workers. He advocated communism of property but not equality. Aristotle supported private property and saw economics as concerning production and chrematistics as money-making. Hesiod emphasized overcoming scarcity through labor and competition. Xenophon discussed household management and the virtues of specialization. All recognized the importance of agriculture and debated concepts like value, wealth, and exchange that formed early economic thought.
Aristotle
1) Aristotle was the first to systematically analyze existing constitutions using a comparative method and was well-versed in many disciplines including politics.
2) He regarded the ideal form of government as aristocracy but advocated for a mixed form of government with rule by rotation to prevent monopoly of political power.
3) In his work Politics, Aristotle analyzed the nature of the state and different constitutions, regarded the state as providing for individual happiness, and defined the state as prior to the individual.
Marxist theory
Karl Marx was a German philosopher who developed Marxist theory. Marxist theory views society as divided along class lines between the bourgeoisie who own the means of production and the proletariat who work for wages. Marx believed that capitalism exploits the working class and would inevitably lead to conflict between the classes and a proletariat revolution. Marxist literary theory sees literature as reflecting the economic base of society and potentially instigating social change by raising class consciousness.
DS1.ppt
This document provides an overview and introduction to a course on Economics for Democratic Socialism. It discusses why the course is being offered given the economic crisis of 2008 and as an alternative to capitalism. It warns that the course will be experimental and share the instructor's ideas. It then outlines some key aspects of democratic socialism including ensuring political democracy, different interpretations of democracy, socialist roots, definitions of social classes over the life cycle, conceptions of classless societies, issues with state socialism, and references the ideas of early socialist thinkers like Robert Owen.
Realism (Part 2)
Realism is an international relations theory that focuses on power and security. It has several core assumptions including that states are the main actors, their primary concern is survival in an anarchic system, and they will use whatever means necessary to ensure their security. There are different strands of realism including classical realism which emphasizes human nature and neo-realism which focuses more on the structure of the international system. Realism is criticized for being too state-centric and for justifying amoral actions in the name of survival. Overall, realism provides a lens for understanding international politics based on power dynamics between self-interested states.
stratification.pptx
This document discusses concepts of social stratification from sociological perspectives including functionalism, conflict theory, and symbolic interactionism. It outlines characteristics of stratification systems such as being social rather than biological, ancient, universal, and consequential in terms of life chances and lifestyle. Common bases or forms of stratification discussed include free and unfree populations, social class, caste, estate and status, occupation and income, race and ethnicity, ruling class, and administrative position.
POLITICAL SCIENCE STATE.pptx
The document discusses the key elements of a state - population, territory, government, and sovereignty. It provides details on each element: population refers to the number and quality of citizens; territory denotes the geographical area over which the state has jurisdiction; government is the institution that determines policies, regulates affairs, and provides services; and sovereignty represents the state's supreme legal authority over both internal and external matters.
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HISTORY OF ECONOMIC THOUGHT - PLATO
- 1. PLATO COURSE INSTRUCTOR: USAMA TAHIR
- 3. PLATO •Wrote first political science BOOK – The Republic – Ideal society and government •One of Socrates’ students, became great philosopher • Left behind great number of writings that record ideas on wide variety of topics, from nature of truth to ideal form of government. • The Republic argues that government should be led by philosophers. 3
- 4. Plato (429-347 B.C) He belongs to city-state of ATHENS. His main achievement was DIVISION OF LABOR. He also gives the plan of IDEAL SOCIAL STRUCTURE. State rise out of the need of mankind. He conclude that city arise because of DIVISION OF LABOR, which emerge because of natural inequalities among human beings. The things are produced in plenty. When one does which is natural to him. For 2000 years later Adam Smith used the same concept.
- 5. There is significant difference in two writer 1) Plato division of labor is the basis of social organization but Smith, division of labor for those who practice it. 2) Plato, inequalities in human being lead specialization but Smith stress the specialization for the point of view of productivity. 3) Plato used this concept for the structure of the society, he used this concept for an idealization of caste system.
- 6. • It is a small one with constant number of citizen, which are administratively convenient. • Economic and non economic activities will be strictly regulated. • His ruler is an ideal one, the ruler will be free from any motive of economic exploitation.
- 7. • There are two classes. 1. Rulers 2. Ruled • Rulers are guardian and ruled are artisans • Artisans are engaged in the main activities of production and exchange of wealth. • The member of ruling class set from childhood and carefully educated not in philosophy but art of war. Because they safe their state. Classes Rulers Ruled
- 8. • Those who pass the exam become the philosopher king and rest hold administrative duties. • Plato believe rule by elite • They do not have any property right beyond the need. They must not hold land or money of their own. • If they acquire then, they become housekeeper and husband instead of guardian. • Upper class does not have property and family. They are not allowed to possess silver and gold.
- 9. • Money need for the purpose of facilitates exchange. Value of money is independent of the stuff it is made off. • Foreign trade is controlled. Necessities may be imported but goods are not export. • Money should not lent on interest. • Inequalities will be reduced by imposing ceiling on wealth. • He did not talk on slavery. • His political ideas were authoritarian • He halted war.