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Jun 26, 2024 · Key Takeaways. Classical economists assume that the most important factor in a product's price is its cost of production. Neoclassical economists argue that the consumer's perception of a product ...
- Will Kenton
Feb 2, 2022 · This chapter provides an overview of neoclassical economics. The term is explained and contrasted with heterodox alternatives. The historical origins of neoclassical economics are presented, emphasizing some forerunners (Antoine Augustin Cournot, Heinrich Hermann Gossen) and discussing the three “founding fathers” of the English, Lausanne ...
- reinhard.neck@aau.at
In the United States, Neoclassicism influenced civics, arts and design, and ideas from the era of Thomas Jefferson (1743-1826) and Abraham Lincoln (1809-1865) through the first half of the 20th century. The classics grew into more than an ornament for the learned elite and cultivated. They permeated popular culture and education.
The neoclassical vision thus involves economic “agents,” be they households or firms, optimizing (doing as well as they can), subject to all relevant constraints. Value is linked to unlimited desires and wants colliding with constraints, or scarcity. The tensions, the decision problems, are worked out in markets.
Neoclassical economics is primarily concerned with the efficient allocation of limited productive resources. It also considers the growth of the resources in the long term. The growth will allow for expanding the production of goods and services. It emphasizes that market equilibrium is the key to an efficient allocation of resources.
May 21, 2020 · Original American economic thinking of increasingly high standing began to emerge with the marginalist work of J. Bates Clark and Irving Fisher—first-rate theoreticians, and builders of the new marginalist and neoclassical economics in America—and the institutionalist work of Thorstein Veblen, without forgetting Frank William Taussig’s important contribution.
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To understand the policy recommendations of the neoclassical economists, it helps to start with the Keynesian perspective. Suppose a decrease in aggregate demand causes the economy to go into recession with high unemployment. The Keynesian response would be to use government policy to stimulate aggregate demand and eliminate the recessionary gap.
