Although there are many people who would disagree with the work of Karl Marx there are few who would doubt his contributions to economics. For much of the twentieth century one third of the world lived in economies that were strongly influenced by his ideas. Although the last few decades have seen the fall of many of these communist countries the ideas of Marx are still important today.
Adam Smith died over two hundred years ago but he is still considered one of the most important economists of all time. This Scottish philosopher wrote a book called the ‘Wealth of Nations’ and his writings still have an influence today. He is often referred to as the founding father of economics.
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.
There are many different groups around the world who would love to see a steady state economy. This ambition is of particular importance to environmentalists who see it as a way to help protect the world from global warming. There are claims that such an economy would be ethically on a sounder footing and would create more happiness for citizens.
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.
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.
Anyone who saw the award winning film “A Beautiful Mind” will probably have heard of “game theory”. This film was based on the true story of John Nash and his battle with schizophrenia. This inspirational figure managed to overcome his mental health problems to go on to win a noble prize. The prize was awarded for his contribution to economics in the form of John Nash game theory; in particular his idea of the Nash’s equilibrium.
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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