Over the years several schools of thought have developed, each of which encompasses its own philosophy and interpretation of reality. The doctrines and assumptions of these schools reflect their underlying philosophies. Consequently, their anticipated and expected outcomes in response to different economic conditions and events are different. The recommended policy responses are also different. This chapter provides a brief summary of the major highlights of some of the more prominent theories.
Austrian School and Business Cycle Theory
Menger1 advanced the concept of marginality, which changed microeconomic analysis. Analysis of value based on the last unit of consumption provided an explanation for the water and diamond ...
Get Monetary Policy within the IS-LM Framework now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
