1. History of Economic Thought
Introduction
Introduction
12/1/2018

2. Introduction Economics Today Terminology
Why Study History of Economic Thought?
Introduction
12/1/2018

3. “Traditional” Topics of Economics
Economics Today – Terminology – Why Study History of Economic Thought?
“Traditional” Topics of Economics
Economic growth
Business cycles
Government policy (taxes, budget, debt)
Monetary policy (inflation, interest rates)
Financial Economics (stock market)
International economics (trade, exchange rates)
Introduction
12/1/2018

4. Other Areas of Economics
Economics Today – Terminology – Why Study History of Economic Thought?
Other Areas of Economics
Introduction
12/1/2018

5. Other Areas of Economics
Economics Today – Terminology – Why Study History of Economic Thought?
Other Areas of Economics
Llussá, F. and Tavares, J., The economics of terrorism: a (simple) taxonomy of the literature. Defence and Peace Economics, 22(2), pp
Introduction
12/1/2018

6. Other Areas of Economics
Economics Today – Terminology – Why Study History of Economic Thought?
Other Areas of Economics
Journal of Sports Economics
Introduction
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7. Other Areas of Economics
Economics Today – Terminology – Why Study History of Economic Thought?
Other Areas of Economics
Webber, Douglas A. Are college costs worth it? How ability, major, and debt affect the returns to schooling. Economics of Education Review 53 (2016):
Introduction
12/1/2018

8. Other Areas of Economics
Economics Today – Terminology – Why Study History of Economic Thought?
Other Areas of Economics
Crime, Racial Discrimination
Fryer Jr, Roland G. An Empirical Analysis of Racial Differences in Police Use of Force. No. w National Bureau of Economic Research, 2016.
ECON Economics of Crime and Justice
Introduction
12/1/2018

9. Other Areas of Economics
Economics Today – Terminology – Why Study History of Economic Thought?
Other Areas of Economics
Family, marriage, divorce
Greenwood, Jeremy, and Nezih Guner. Marriage and divorce since World War II: analyzing the role of technological progress on the formation of households. NBER Macroeconomics Annual 23, no. 1 (2008):
Basic idea: labor-saving technology makes it easier for singles to maintain their own home.
Introduction
12/1/2018

10. Other Areas of Economics
Economics Today – Terminology – Why Study History of Economic Thought?
Other Areas of Economics
Abortion
Donohue, John J., and Steven D. Levitt. The impact of legalized abortion on crime The Quarterly Journal of Economics 116, no. 2 (2001):
Basic idea: (i) Legalized abortion leads to fewer "unwanted" babies being born, and (ii) Unwanted babies are more likely to suffer abuse and neglect and are therefore have higher risk for criminal involvement later in life.
Introduction
12/1/2018

11. What is Economics? Addiction
Economics Today – Terminology – Why Study History of Economic Thought?
What is Economics?
Addiction
Becker, G.S. and Murphy, K.M., A theory of rational addiction. Journal of political Economy, 96(4), pp
Introduction
12/1/2018

12. What is Economics? Suicide
Economics Today – Terminology – Why Study History of Economic Thought?
What is Economics?
Suicide
Hamermesh, D.S. and Soss, N.M., An economic theory of suicide. Journal of Political Economy, 82(1), pp
Introduction
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13. Other Areas of Economics
Economics Today – Terminology – Why Study History of Economic Thought?
Other Areas of Economics
Environmental Economics
ECON Environmental Economics
Introduction
12/1/2018

14. Economics Today – Terminology – Why Study History of Economic Thought?
What is Economics?
Introduction
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15. The Central Focus of Modern Economic Thought
Economics Today – Terminology – Why Study History of Economic Thought?
The Central Focus of Modern Economic Thought
Scarcity – wants exceed available resources.
Mechanisms to allocate scarce resources
Brute force
Tradition
Central planning (government, church)
Markets
Modern economics is focusing primarily on how markets operate
Introduction
12/1/2018

16. The Central Focus of Modern Economic Thought
Economics Today – Terminology – Why Study History of Economic Thought?
The Central Focus of Modern Economic Thought
Definition of Economics – a social science that studies how people (individuals, firms and societies) make decisions about scarce resources.
Introduction
12/1/2018

17. Divisions of Modern Economic Theory
Economics Today – Terminology – Why Study History of Economic Thought?
Divisions of Modern Economic Theory
Microeconomics – questions of allocation and distribution
Allocation – what to produce and how to produce
Distribution – how real income is divided among the members of society
Main tool – demand and supply
Macroeconomics – questions of stability and growth
Introduction
12/1/2018

18. Orthodox and Heterodox Economists
Economics Today – Terminology – Why Study History of Economic Thought?
Orthodox and Heterodox Economists
Orthodox – mainstream or “legitimate” approach; included in graduate schools programs
Heterodox – considered by mainstream economists as “illegitimate” approach
The distinction is not “black and white”, and often what was heterodox in the past, became orthodox later
Introduction
12/1/2018

19. Economics as an Art and as a Science
Economics Today – Terminology – Why Study History of Economic Thought?
Economics as an Art and as a Science
Positive Economics – concerns with understanding the forces that govern economic activity: How does the economy work? What are the forces that determine the distribution of income?
Normative Economics – concerns with questions of what should be. Integration of economics and ethics.
The art of economics – questions of policy, relating the science of positive economics to achieve normative goals.
Introduction
12/1/2018

20. Which are positive and which are normative statements?
Economics Today – Terminology – Why Study History of Economic Thought?
Which are positive and which are normative statements?
Human activity caused the recent global warming.
We should do something about the global warming.
The wall on the Mexican border costs 15 billion dollars.
We should build a wall on the Mexican border.
Introduction
12/1/2018

21. Key Normative Questions
Economics Today – Terminology – Why Study History of Economic Thought?
Key Normative Questions
How much freedom should we have?
What kind of government should we have?
When and how should the government intervene in our lives?
What kind of laws should we have?
These are the questions that thinkers debated the since early civilization.
Introduction
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22. Methodological Issues – How Should we Study Economics?
Economics Today – Terminology – Why Study History of Economic Thought?
Methodological Issues – How Should we Study Economics?
Inductive reasoning – empirical, theory based on observation (e.g. Adam Smith).
Deductive reasoning – based on logic, applies general ideas to particular instances (e.g. David Ricardo).
Abductive reasoning – a mix of the above (e.g. John Stuart Mill, most modern economists)
Introduction
12/1/2018

23. Why Study History of Economic Thought?
Economics Today – Terminology – Why Study History of Economic Thought?
Why Study History of Economic Thought?
Becoming better economists
Learning previous methodologies and ideas
Improving logical deduction
Humility - learning from mistakes
Develop critical thinking
Introduction
12/1/2018

24. Why Study History of Economic Thought?
Economics Today – Terminology – Why Study History of Economic Thought?
Why Study History of Economic Thought?
Studying old ideas to be inspired and create new ideas
Summarizing the material learned in previous courses, filling gaps in understanding of principles of economics
Grasping the enormous scope of Economics
Introduction
12/1/2018