ECO 3132 Chapter 1: Textbook ch 1
25 Jan 2019
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Document Summary
Four mechanisms throughout history to deal with scarcity: oldest : brute force, tradition, emphasized past ways of allocating resources, authority, came with development of civilization. Institutions - government and church: market, developed over time, primary allocator in western europe. Modern orthodox economic theory consists of a body of knowledge that includes both micro and macroeconomics. Increasing professionalism in economics: progress of theory doesn"t merely reflect historical circumstances - depends on the discovery and explanation of unsolved problems, possible to rank theories absolutely according to their worth. Orthodox economists: modern orthodox focus on allocation, distribution, stability and growth. Study economic behavior in the context of specific social, political, and economic institutions. Heterodox economic theory: austrians, institutionalists, post keynesians, radicals. Studied forces that produce changes in the society and economy. Focus on forces leading the development of social, political and economic institutions. Defining heterodoxy: defining characteristic - revealed illegitimacy.
