Written by Yang Yang ·
Filed under Basic Economic Concepts, Economics, History of Economics
Austrian Economics dates back all the way to the fifteenth century. It is based on the assumption that the actions of social groupings and individual humans follow natural laws much in the same way as other aspects of nature. It has been the aim of Austrian economics to produce theories to explain these actions; although the claim that this should involve different tools than used in hard science. Followers of this theory of economics are strong advocates for complete freedom in the marketplace; they believe that industry should be allowed to make voluntary contracts but they should not be coerced into anything. The reason why it is called the Austrian school is that many of the early proponents of the theory were from Austria; most supporters of the school these days do not come from anywhere near Austria.
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Written by Yang Yang ·
Filed under Basic Economic Concepts, Economics
Pareto efficiency is something you may sometimes hear mentioned in relation to economic theory. It is named after an Italian economist named Vilfredo Pareto. The idea of a Pareto efficiency is not related to equity because something can be meet the requirements of Pareto efficiency but be very inequitable indeed. The idea of Pareto efficiency is of interest to economists and it is particular importance for game theory.
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Written by Yang Yang ·
Filed under Basic Economic Concepts, Economics, Macroeconomics
The business cycle is something you will frequently hear economists mention. It is often discussed in relation to a countries economic performance or how markets are behaving on a global scale. It seems to be quite an important concept so what does it actually refer to?
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Written by Yang Yang ·
Filed under Basic Economic Concepts, Basic Finance Concepts, World Economy
Anyone who watches the news is sure to have heard about the World Bank, but there may be some uncertainty as to what this institution actually is. Confusion about the World Bank is understandable as it is unlike any other bank people will be familiar with. In fact many would argue that it isn’t even a bank at all and more an agency that specializes in providing leveraged loans.
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Written by Yang Yang ·
Filed under Basic Economic Concepts, Economics
Diminishing returns is probably one of the most important concepts in Economic theory. It is so famous that it has now entered common everyday speech. Some people do get confused with diminishing returns but it is actually quite a simple idea.
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Written by Yang Yang ·
Filed under Basic Economic Concepts, Microeconomics
An important idea in economic theory is economies of scale. If it wasn’t for the existence of this phenomena it is doubtful that the world economy would look anything like it does today. The reason large companies and multinationals exist is because they take advantage of economy of scale.
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Written by Yang Yang ·
Filed under Basic Economic Concepts, Macroeconomics
Those who listen to the financial news may have heard the term ‘Keynesian economics’ floated around. There may be some confusion as to what this is actually referring to. Discussions about the validity of this theory can become heated among economists so it is worth having some idea as to what is behind it all. A basic explanation will be provided here.
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Written by Yolander Prinzel ·
Filed under Basic Economic Concepts, EconGuru
Yesterday, In Part 1 we discussed economics terminology as it relates to your household budget. Today, let’s create a real example of the terminology in action.
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