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Underconsumption
Underconsumption is a theory in economics that recessions and stagnation arise from an inadequate consumer demand, relative to the amount produced. In other words, there is a problem of overproduction and overinvestment during a demand crisis. The theory formed the basis for the development of Keynesian economics and the theory of aggregate demand after the 1930s. Underconsumption theory narrowly refers to heterodox economists in Britain in the 19th century, particularly from 1815 onwards, who advanced the theory of underconsumption and rejected classical economics in the form of Ricardian economics. The economists did not form a unified school, and their theories were rejected by mainstream economics of the time. Underconsumption is an old concept in economics that goes back to the 1598 French mercantilist text ''Les Trésors et richesses pour mettre l'Estat en splendeur'' (''The Treasures and riches to put the State in splendor'') by Barthélemy de Laffemas, if not earlier. ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Crisis Theory
Crisis theory, concerning the causes and consequences of the tendency for the rate of profit to fall in a capitalist system, is associated with Marxian critique of political economy, and was further popularised through Marxist economics. History Earlier analysis by Jean Charles Léonard de Sismondi provided the first suggestions of the systemic roots of Crisis. "The distinctive feature of Sismondi's analysis is that it is geared to an explicit dynamic model in the modern sense of this phrase ... Sismondi's great merit is that he used, systematically and explicitly, a schema of periods, that is, that he was the first to practice the particular method of dynamics that is called period analysis". Marx praised and built on Sismondi's theoretical insights. Rosa Luxemburg and Henryk Grossman both subsequently drew attention to both Sismondi's work on the nature of capitalism, and as a reference point for Karl Marx. Grossman in particular pointed out how Sismondi had contributed t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Overproduction
In economics, overproduction, oversupply, excess of supply, or glut refers to excess of supply over demand of products being offered to the market. This leads to lower prices and/or unsold goods along with the possibility of unemployment. The demand side equivalent is underconsumption; some consider supply and demand two sides to the same coin – excess supply is only relative to a given demand, and insufficient demand is only relative to a given supply – and thus consider overproduction and underconsumption equivalent. In lean thinking, overproduction of goods or goods in process is seen as one of the seven wastes (Japanese term: '' muda'') which do not add value to a product, and is considered "the most serious" of the seven.EKU OnlineThe Seven Wastes of Lean Manufacturing ''Eastern Kentucky University'', accessed 6 March 2023 Overproduction is often attributed to previous overinvestment – creation of excess productive capacity, which must then either lie idle ( ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Keynesian Economics
Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomics, macroeconomic theories and Economic model, models of how aggregate demand (total spending in the economy) strongly influences Output (economics), economic output and inflation. In the Keynesian view, aggregate demand does not necessarily equal the aggregate supply, productive capacity of the economy. It is influenced by a host of factors that sometimes behave erratically and impact production, employment, and inflation. Keynesian economists generally argue that aggregate demand is volatile and unstable and that, consequently, a market economy often experiences inefficient macroeconomic outcomes, including economic recession, recessions when demand is too low and inflation when demand is too high. Further, they argue that these economic fluctuations can be mitigated by economic policy responses coordinated between a government and their central bank. ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Business Cycles
Business cycles are intervals of general expansion followed by recession in economic performance. The changes in economic activity that characterize business cycles have important implications for the welfare of the general population, government institutions, and private sector firms. There are many definitions of a business cycle. The simplest defines recessions as two consecutive quarters of negative GDP growth. More satisfactory classifications are provided by, first including more economic indicators and second by looking for more data patterns than the two quarter definition. In the United States, the National Bureau of Economic Research oversees a Business Cycle Dating Committee that defines a recession as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales." Business cycles are usually thought of as medium-term evo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Mainstream Economics
Mainstream economics is the body of knowledge, theories, and models of economics, as taught by universities worldwide, that are generally accepted by economists as a basis for discussion. Also known as orthodox economics, it can be contrasted to heterodox economics, which encompasses various schools or approaches that are only accepted by a small minority of economists. The economics profession has traditionally been associated with neoclassical economics. However, this association has been challenged by prominent historians of economic thought including David Colander. They argue the current economic mainstream theories, such as game theory, behavioral economics, industrial organization, information economics, and the like, share very little common ground with the initial axioms of neoclassical economics. History Economics has historically featured multiple schools of economic thought, with different schools having different prominence across countries and over time. P ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Das Kapital
''Capital: A Critique of Political Economy'' (), also known as ''Capital'' or (), is the most significant work by Karl Marx and the cornerstone of Marxian economics, published in three volumes in 1867, 1885, and 1894. The culmination of his life's work, the text contains Marx's analysis of capitalism, to which he sought to apply his theory of historical materialism in a critique of political economy, critique of classical political economy. 's second and third volumes were completed from manuscripts after Marx's death in 1883 and published by Friedrich Engels. Marx's study of political economy began in the 1840s, influenced by the works of the classical political economists Adam Smith and David Ricardo. His earlier works, including ''Economic and Philosophic Manuscripts of 1844'' and ''The German Ideology'' (1846, with Engels), laid the groundwork for his theory of historical materialism, which posits that the Base and superstructure, economic structures of a society (in par ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Barthélemy De Laffemas
Barthélemy de Laffemas was an economist, born in Beausemblant, France in 1545. He is officially recorded as dying in Paris in 1612. However, it is rumoured that he actually died on September 23, 1611, after falling from his horse. He is known as the first person to write about underconsumption Biography Beginnings Coming from the gentry Protestant, poor, he worked and became a tailor. He left the Dauphiné and went to Navarre. There he met Henry of Navarre, the future Henry IV of France. Then, in 1576, he became a "silver merchant" for the king. In 1579, the king owes his supplier 483 491 pounds. He had to borrow the money for his business, paid in annuities. In a memoir, Laffemas wrote that he lifted "..the silverware shop of the king, and borrowed over two hundred thousand crowns ...". These annuities are not as good and he was pursued by the creditors, and imprisoned for debt. When Henry of Navarre became King of France he was freed. General of Trade In 1596, in his "memor ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Say's Law
In classical economics, Say's law, or the law of markets, is the claim that the production of a product creates demand for another product by providing something of value which can be exchanged for that other product. So, production is the source of demand. It is named after Jean-Baptiste Say. In his principal work, ''A Treatise on Political Economy'' "A product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value." And also, "As each of us can only purchase the productions of others with his/her own productions – as the value we can buy is equal to the value we can produce, the more men can produce, the more they will purchase." Some maintain that Say further argued that this law of markets implies that a general glut (a widespread excess of supply over demand) cannot occur. If there is a surplus of one good, there must be unmet demand for another: "If certain goods remain unsold, it is because other goods a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Fixed Investment
Fixed investment in economics is the purchase of newly produced physical asset, or, fixed capital. It is measured as a flow variable – that is, as an amount per unit of time. Thus, fixed investment is the sum of physical assets such as machinery, land, buildings, installations, vehicles, or technology. Normally, a company balance sheet will state both the amount of expenditure on fixed assets during the quarter or year, and the total value of the stock of fixed assets owned. Fixed investment contrasts with investments in labour, ongoing operating expenses, materials or financial assets. Financial assets may also be held for a fixed term (for example, bonds) but they are not usually called "fixed investment" because they do not involve the purchase of physical fixed assets. The more usual term for such financial investments is "fixed-term investments". Bank deposits committed for a fixed term such as one or two years in a savings account are similarly called "fixed-term deposi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Marx
Karl Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, political theorist, economist, journalist, and revolutionary socialist. He is best-known for the 1848 pamphlet '' The Communist Manifesto'' (written with Friedrich Engels), and his three-volume (1867–1894), a critique of classical political economy which employs his theory of historical materialism in an analysis of capitalism, in the culmination of his life's work. Marx's ideas and their subsequent development, collectively known as Marxism, have had enormous influence. Born in Trier in the Kingdom of Prussia, Marx studied at the universities of Bonn and Berlin, and received a doctorate in philosophy from the University of Jena in 1841. A Young Hegelian, he was influenced by the philosophy of Georg Wilhelm Friedrich Hegel, and both critiqued and developed Hegel's ideas in works such as '' The German Ideology'' (written 1846) and the '' Grundrisse'' (written 1857–1858). While in Paris, Marx wrote h ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Poverty
Poverty is a state or condition in which an individual lacks the financial resources and essentials for a basic standard of living. Poverty can have diverse Biophysical environment, environmental, legal, social, economic, and political causes and effects. When evaluating poverty in statistics or economics there are two main measures: ''absolute poverty'' which compares income against the amount needed to meet basic needs, basic personal needs, such as food, clothing, and Shelter (building), shelter; secondly, ''relative poverty'' measures when a person cannot meet a minimum level of living standards, compared to others in the same time and place. The definition of ''relative poverty'' varies from one country to another, or from one society to another. Statistically, , most of the world's population live in poverty: in Purchasing Power Parity, PPP dollars, 85% of ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyses what is viewed as basic elements within economy, economies, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings, and Expenditure, investment expenditure interact; and the factors of production affecting them, such as: Labour (human activity), labour, Capital (economics), capital, Land (economics), land, and Entrepreneurship, enterprise, inflation, economic growth, and public policies that impact gloss ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
