CHRONOLOGICAL ORDER OF ECONOMIC THEORIES

Micro Economics

Theories of Consumer Behaviour

1. Marginal Utility Analysis –Marshall – 1890

2. Revealed Preference Theory – Samuelson – 1938

3. Indifference Curve Theory – Hicks and Allen – 1934

4. Neumann – Morgenstern Approach – 1944

5. Friedman – Savage Hypothesis – Friedman and Savage- 1948

Market

1. Cournot Duopoly Model – Cournot – 1838

2. Edgeworth Oligopoly Model – Edgeworth – 1881

3. Bertrand’s Duopoly Model – Bertrand – 1883

4. Imperfect Competition – Joan Robinson - 1933

5. Monopolistic Competition – Chamberlin – 1933

6. Stackelberg’s Duopoly Model – Heinrich Von Stackelberg – 1934

7. Kinked Demand Curve – Paul M Sweezy - 1939

8. Game Theory – Neumann and Morgenstern – 1944

Welfare Criterion

1. Social Welfare Function – Bergson, Samuelson - 1938

2. Impossibility Theorem – Arrow– 1951

3. Theory of Second Best – Richard Lipsey and Kelvin Lancaster-1956

4. Coase Theorem – Ronald Coase - 1959

5. Asymmetric Information - George Akerlof, Michael Spence, and Joseph E. Stiglitz – 2001

Rent

1. Ricardian Theory of Rent – Ricardo – 1810

2. Modern Theory of Rent – Joan Robinson -

3. Quasi- Rent – Marshall-

Profit

1. Dynamic Theory of Profit – J.B.Clark – 1900

2. Rent Theory of Profit – F.A. Walker –

3. Risk Theory of Profit – H.B. Hawley – 1907

4. Innovation Theory of Profit – Joseph A Schumpeter – 1934

Macro Economics

Consumption Function

1. Absolute Income Hypothesis – Keynes – 1936

2. Relative Income Hypothesis – Duesenberry – 1949

3. Life Cycle Hypothesis – Ando, Modigliani – 1950

4. Permanent Income Hypothesis – Friedman – 1957

Effect

1. Keynes Effect – Keynes – 1936

2. Pigou Effect – A. C. Pigou – 1943

3. Real Balance Effect - Patinkin- 1956

Multiplier and Acceleration

1. Accelerator – J.M. Clark -1917

2. Multiplier – R.F. Khan – 1931

Demand for Money

1. Classical Theory – 1911

2. Keynesian Theory – Keynes - 1936

3. Inventory Approach – Baumol -1950

4. Restatement of Quantity Theory – Friedman – 1956

5. Port-folio Approach – Tobin – 1969

Quantity Theory of Money

1. Cash Transaction Approach – Fisher – 1911

2. Cash Balance Approach- Cambridge economists –

A.C.Pigou (1917), Alfred Marshall (1923), D.H. Robertson (1922), John Maynard Keynes (1923), R.G. Hawtrey and Frederick Lavington (1921, 1922).

3. Reformulated Quantity Theory of Money – Keynes – 1930s

4. Real Balance Effect – Don Patinkin – 1956

Other

1. IS-LM model – Hicks - 1937

2. Monetary Approach to BOP- Hahn - 1959

3. Philips Curve –A. W. H. Phillips - 1958

4. Mundell Fleming Model – Robert Mundell and Marcus Fleming 1960

5. Optimum Currency Area – Robert Mundell – 1960

Development Economics

1. Marxian Theory of Economic Development – Marx – 1867

2. Lorenz Curve – 1905

3. Schumpeterian Theory – Schumpeter – 1911

4. Harrod Model – R.F. Harrod – 1939

5. Big Push Theory – Rosenstein Rodan – 1943

6. Domar Model – 1946

7. Dependency Theory – 1949

8. Balanced Growth – Rosenstein Rodan, Ragnar Nurkse, Arthur Lewis, Scitovsky, and Leibenstein – 1950

9. Unbalanced Growth – Hirschman -1950

10. Vicious Circle of Poverty – Nurkse – 1953

11. Theory of Unlimited Supplies of Labor – W.A. Lewis - 1954

12. Inverted U-hypothesis – 1955

13. Wage –Good Model- Brahmananda and Vakil - 1956

14. The Long-run Growth Model – R.M. Solow- 1956

15. Low Level Equilibrium trap – Nelson – 1956

16. Capital Accumulation Model- Joan Robinson- 1956

17. Critical Minimum Effort Thesis – Leibenstein – 1957

18. Kaldor model – Kaldor – 1957

19. Technical Progress of Kaldor – 1960

20. Kaldor-Mirrles Model – 1962

21. Fei – Rani’s Theory of Developmnet –John Fei and Gustav Rani- 1964

22. Two Gap Model –Hollis Chenery –1966

23. Learning by Doing – Arrow -1980

24. Endogenous Growth Model - 1980

25. Romer Model – 1986

Investment Criterion

1. The Capital Turn Over Criterion – J.J. Polak and N.S. Buchanan – 1943

2. Social Marginal Productivity Criterion –A.E. Khan and Hollis Chenery – 1951

3. The Reinvestment Criterion – Galenson & Leibenstein – 1955

4. Marginal Per Capita Reinvest Criterion - 1955

5. The Time Series Criterion – A.K.Sen - 1957

6. Reinvestment Surplus Coefficient Criterion - 1960

Technical Change

1. Disembodied Technical Change – Abramkovitz – 1956

2. Embodied Technical Change – Solow – 1960

Measurement of Economic Development

1. Per Capita Income Approach – late 1950’s

2. Basic Need Approach by World Bank – 1970’s

3. PQLI – 1979

4. HDI – 1990’s

International Economics

1. Absolute Cost Advantage Theory – Adam Smith – 1776

2. Comparative Cost Advantage theory –Ricardo – 1817

3. Modern Theory of International Trade – Hecksher and Ohlin – 1919

4. Purchasing Power Parity Theory – Gustav Cassel - 1920

5. Opportunity Cost Theory – Gottfried Haberler – 1933

6. Stopler–Samuelson Theory–Wolfgang Stopler & Paul Samuelson -1941

7. Factor Price Equalization Theorem – 1948

8. Metzler Paradox–Lloyd A. Metzler – 1949

9. Secular Deterioration Theorem- Prebisch & Singer - 1950

10. Leontief Paradox–Leontief – 1950

11. Absorption Approach – Sidney Alexander – 1952

12. Rybczynski Theorem- Tadeusz Rybcznski -1955

13. Immiserizing Growth- Jagadish Bhagawati- 1958

14. Reciprocal Dumping Model –Brander & Krugman - 1981

Schools

Physiocrats

1710 - 1765

Physiocrats are a group of economists who believed that the wealth of nations was derived solely from the value of "land agriculture" or "land development." And Physiocracy is an economic theory developed by Physiocrats. Their theories originated in France and were most popular during the second half of the 18th century. Physiocracy is perhaps the first well-developed theory of economics.

Classical School

1735 - 1860

Classical economics is widely regarded as the first modern school of economic thought. Its major developers include Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Malthus and John Stuart Mill. Classical economists claimed that free markets regulate themselves, when free of any intervention. Adam Smith referred to a so-called invisible hand, which will move markets towards their natural equilibrium, without requiring any outside intervention.

Pre-runner:

Adam Smith

Ricardo

Malthus

Mill, James

Mill, John Stuart

Say

Pre-Marginalists

1800 - 1850

The pre - marginalist did, as the marginalists, focus upon maximization and individual behaviour, either on the production or the demand side of the economy. However, contrary to the marginalist, they did not achieve much publication and fame in the scientific environment.

Von Thunen

Dupuit

Cournot

Neoclassical Economist 1850 - 1970

Irving Fisher introduced the term neoclassical economy in 1900, but it was later used to include the works of also earlier writers. The term is a umbrella term for several different schools including marginalism. However, excluding institutional economics and Marxism. As expressed by E. Roy Weintraub, neoclassical economics rests on three assumptions, although certain branches of neoclassical theory may have different approaches: - People have rational preferences among outcomes that can be identified and associated with a value. - Individuals maximize utility and firms maximize profits. - People act independently on the basis of full and relevant information.

• Jevons

• Menger

• Walras

• Von Weiser

• Von Bohm-Bawerk

• Marshall

• Wicksell

• Fisher

• Slutsky

• Pareto

• Hicks

The Marginalists 1850 - 1900

The Marginalists includes Jevons, Menger and Walras, who were the most important contributors to the Marginal Revolution. They worked on the decisions made by individuals in the economy and developed the demand and supply curves. The three of the began the process of making economics a profession.

• Jevons

• Walras

• Menger

Austrian School 1865 - 1920

The Austrian School of economics is a school of economic thought which bases its study of economic phenomena on the interpretation and analysis of the purposeful actions of individuals It derives its name from its origin in late-19th and early-20th century Vienna with the work of Carl Menger, Eugen Von Bohm-Bawerk, Friedrich von Wieser, and others.

• Menger

• Von Bohm-Bawerk

• Von Weiser

American Institutionalist 1918 - 1950

The ‘institutional approach’ to economics goes back to a conference paper in 1918 by Walton Hamilton titled ‘The Institutional Approach to Economic Theory’. The paper was a call for the profession at large to adopt the ‘institutional approach’ and a conception of economic theory that was: (i) capable of giving unity to economic investigations of many different areas; (ii) relevant to the problem of social control; (iii) relate to institutions as both the ‘changeable elements of economic life and the agencies through which they are to be directed’; (iv) concerned with ‘process’ in the form of institutional change and development; and (v) based on an acceptable theory of human behaviour, in harmony with the ‘conclusions of modern social psychology’. At its inception, then, institutionalism could be seen as a very promising program – modern, scientific, pointing to a critical investigation and analysis of the existing economic system and its performance. Institutionalism was critical of marginal utility theory as a basis for a theory of consumption and emphasized the social nature of the formation of consumption values. Institutionalism had a strong position in American economics in the interwar period, but declined in prestige after WWII from mainstream of American economics to a heterodox tradition on the margins of the discipline.

Keynesian Economists 1945 - 1980

Neo-Keynesian economics is a school of macroeconomic thought that was developed in the post-war period from the writings of John Maynard Keynes. A group of economists (notably John Hicks, Franco Modigliani, and Paul Samuelson), attempted to interpret and formalize Keynes' writings, and to synthesize it with the neo-classical models of economics. Their work has become known as the neo-classical synthesis, and created the models that formed the core ideas of neo-Keynesian economics. These ideas dominated mainstream economics in the post-war period, and formed the mainstream of macroeconomic thought in the 1950s, 60s and 70s. Pre-runner: - John Maynard Keynes

• Hicks

• Modigliani

• Samuelson

New Classical Economists 1970 - Present

New classical macroeconomics, sometimes simply called new classical economics, or monetarists, is a school of thought in macroeconomics that builds its analysis entirely on a neoclassical framework. Specifically, it emphasizes the importance of rigorous foundations based on microeconomics, especially rational expectations. New classical macroeconomics strives to provide neoclassical microeconomic foundations for macroeconomic analysis. This is in contrast with its rival new Keynesian school that uses micro foundations such as price stickiness and imperfect competition to generate macroeconomic models similar to earlier, Keynesian ones. One of the most famous new classical models is the real business cycle model, developed by Edward C. Prescott and Finn E. Kydland.

New-Keynesian Economist 1991 - Present

New Keynesian economics is a school of contemporary macroeconomics that strives to provide microeconomic foundations for Keynesian economics. It developed partly as a response to criticisms of Keynesian macroeconomics by adherents of New Classical macroeconomics. Two main assumptions define the New Keynesian approach to macroeconomics. Like the New Classical approach, New Keynesian macroeconomic analysis usually assumes that households and firms have rational expectations. But the two schools differ in that New Keynesian analysis usually assumes a variety of market failures. In particular, New Keynesians assume that there is imperfect competition[1] in price and wage setting to help explain why prices and wages can become "sticky", which means they do not adjust instantaneously to changes in economic conditions. Wage and price stickiness, and the other market failures present in New Keynesian models, imply that the economy may fail to attain full employment. Therefore, New Keynesians argue that macroeconomic stabilization by the government (using fiscal policy) or by the central bank (using monetary policy) can lead to a more efficient macroeconomic outcome than a laissez faire policy would.