Economics Report PDF

Written Report Ferrer, Princess Jean Flores, Cristine Joy Garcia, Nicole Marie Angelika Economics- came from the ancient Greek word, oeconomicus meant “management of the household.” Aristotle (384–322 B.C.) engaged in economic thinking by distinguishing between “natural and unnatural arts of ac...

Written Report Ferrer, Princess Jean Flores, Cristine Joy Garcia, Nicole Marie Angelika Economics- came from the ancient Greek word, oeconomicus meant “management of the household.” Aristotle (384–322 B.C.) engaged in economic thinking by distinguishing between “natural and unnatural arts of acquisition.” Aristotle thought that getting things you need to survive, like food and shelter, was natural. This could be done by farming, fishing, or hunting. But he didn't like it when people got things they didn't really need, like fancy clothes or expensive jewelry. He thought that was unnatural and not a good use of resources. Plato (427–347 B.C.) wrote of the benefits of human specialization within the ideal city-state. Plato's idea about people being good at different things and focusing on those skills was like a preview of what Adam Smith would say later. Adam Smith talked about how dividing up work into smaller tasks, where people specialize, makes things more efficient. The Bible contains several thoughts on economics, including those in opposition to lending at interest. In the Middle Ages, St. Thomas Aquinas (1225–1274) advanced the idea of a just price: A fair price is when both the person buying and the person selling feel like they are getting a good deal without one person tricking the other. The period before A.D. 1500 represented an epoch far different from the 1500s to the present. There was little trade before 1500, and most goods were produced for consumption in the community that produced them without first being sent to market. Back then, people didn't use money and credit as much, even though they did exist long ago. Countries weren't as organized, and there weren't established ways of thinking about how economies work. And they haven't any schools of economic thought been formed. Markets and trade expanded rapidly after 1500, with the great geographical explorations both resulting from this process and accelerating it. Over time, societies shifted from relying on self- sufficiency to using money for trade. Countries with organized economies became powerful. As economies grew, schools of thought emerged, forming structured ideas and policies for managing them. In the 1500s, the “age of political economy” began to supplant the “age of moral philosophy.” When people started paying more attention to how politics and economics are connected, it helped organize economic thoughts better. This process turned bits and pieces of economic ideas into complete and organized theories. A time scale of economic ideas Economic thinking has displayed a significant degree of continuity over the centuries. These relations among different school of thought are depicted in the Time Scale of Economic Ideas Each rectangle in the Time Scale represents a major school or approach - Mercantilism, Physiocracy, Classicism, Marxism & Socialism The name in each rectangle are economists who were most important or most typical in developing that school or approach. - Mercantilism (Mun, Colbert) - Physiocracy (Quesnay, Turgot) Classicism (Adam Smith, Ricardo, Malthus, Bentham, Say, Mill) The name immediately above each rectangle are forerunners of the school.  - Classicism (North, Cantillon) - German Historicism (List) - Marxism & Socialism (Sismondi) A black arrow shows that the latter group was antagonistic to or rose in opposition to the earlier group. - Physiocrats were completely opposed to the doctrines of the Mercantilist. A white arrow linking 2 rectangles shows that the latter group was generally friendly to the group from which it grew or that it superseded. - Classical School were friendly toward the Physiocrats. A dashed arrow indicates groups in which some contributors were friendly to predecessors, but others were antagonistic. - Some welfare economists advanced marginalists ideas, whereas others challenged those ideas. The value of studying Economics and its History “Will it be worth the effort? Why study economic theory? Why study its history?” Why Study Economic Theory? 1. Understanding How Economies Work: One of the primary reasons to study economic theory is to gain an understanding of how an economy functions. This involves exploring the mechanisms that allow economies to operate smoothly, such as supply and demand, market equilibrium, inflation, unemployment, and economic growth. 2. Achieving Economic Goals: Economic theory provides tools and frameworks that help societies achieve their chosen economic goals, such as economic growth, full employment, price stability, and equitable distribution of income. Why Study the History of Economic Thought? Enhances one’s understanding of contemporary economic thought. “Contemporary theory wears the scars of yesterday’s problems now resolved, yesterday blunders now corrected and cannot be fully understood except as a legacy handed down from the past.” Mark Blaug, Economic Theory in Retrospect, 4th ed. (London: Cambridge University Press, 1985) Enable us to make fewer errors than in the past when making personal decisions and when formulating national and local economic policies. Our understanding of past successes, errors, and dead ends will be useful in solving economic problems and answering economic questions. Provides perspective and understanding of our past, of changing ideas and problems, and of our direction of movement. A study of the evolution of economic thought & the changing social background associated with it can illuminate changes in other areas of concern to us, such as politics, art, philosophy and science.