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A Robinson Crusoe economy is a simple framework used to study some fundamental issues in economics. [1] It assumes an economy with one consumer, one producer and two goods. The title "Robinson Crusoe" is a reference to the 1719 novel of the same name authored by Daniel Defo
“Behaviour in the public sphere, by contrast, is largely non-instrumental because it is non-consequential". Individuals make no difference to the outcome, “much as single molecules make no difference to the properties of the gas" [citation needed] (Herbert, G). This is a weakness of rational choice theory as it shows that in situations such ...
Structural unemployment is a form of involuntary unemployment caused by a mismatch between the skills that workers in the economy can offer, and the skills demanded of workers by employers (also known as the skills gap). Structural unemployment is often brought about by technological changes that make the job skills of many workers obsolete.
Behavioral economics is the study of the psychological (e.g. cognitive, behavioral, affective, social) factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by traditional economic theory. [1] [2] Behavioral economics is primarily concerned with the bounds of rationality of economic ...
In academia, most economists have a Ph.D. degree in Economics. [citation needed] In the U.S. Government, on the other hand, a person can be hired as an economist provided that they have a degree that included or was supplemented by 21 semester hours in economics and three hours in statistics, accounting, or calculus. [8]
Classical economists and their immediate predecessors reoriented economics away from an analysis of the ruler's personal interests to broader national interests. Adam Smith, following the physiocrat François Quesnay, [7] identified the wealth of a nation with the yearly national income, instead of the king's treasury. Smith saw this income as ...
Economists have come up with many ideas to answer the above question. The one which currently dominates the academic literature on real business cycle theory [citation needed] was introduced by Finn E. Kydland and Edward C. Prescott in their 1982 work Time to Build And Aggregate Fluctuations. They envisioned this factor as technological shocks ...
Keynes summarizes the view of classical economists that the economy should be self-adjusting if wages are fluid, and that they blame rigidity in wages for problems like unemployment. He disagrees with what he says is the orthodox view, based on the quantity theory of money , is that wage reductions have a small effect on aggregate demand, but ...