Neoclassical Economics: Demystifying Neoclassical Economics, Navigating Modern Markets with Clarity

By Fouad Sabry

What is Neoclassical Economics

In the field of economics, neoclassical economics refers to an approach that observes the production, consumption, and valuation (price) of commodities and services as being driven by the supply and demand model. According to this school of thinking, the value of a product or service is established by a hypothetical process that involves the maximization of utility by individuals with limited incomes and of profits by businesses that are confronted with production costs and make use of the information and factors of production that are accessible. By making reference to rational choice theory, this strategy has frequently been defended as being appropriate.

How you will benefit

(I) Insights, and validations about the following topics:

Chapter 1: Neoclassical economics

Chapter 2: Economics

Chapter 3: Keynesian economics

Chapter 4: Microeconomics

Chapter 5: Perfect competition

Chapter 6: General equilibrium theory

Chapter 7: New Keynesian economics

Chapter 8: Index of economics articles

Chapter 9: Classical economics

Chapter 10: Economic efficiency

Chapter 11: Welfare economics

Chapter 12: Steve Keen

Chapter 13: Heterodox economics

Chapter 14: Sonnenschein-Mantel-Debreu theorem

Chapter 15: Schools of economic thought

Chapter 16: Dynamic stochastic general equilibrium

Chapter 17: Microfoundations

Chapter 18: Neoclassical synthesis

Chapter 19: New classical macroeconomics

Chapter 20: Macroeconomics

Chapter 21: History of macroeconomic thought

(II) Answering the public top questions about neoclassical economics.

(III) Real world examples for the usage of neoclassical economics in many fields.

Who this book is for

Professionals, undergraduate and graduate students, enthusiasts, hobbyists, and those who want to go beyond basic knowledge or information for any kind of neoclassical economics.

• Language: English
• Publisher: One Billion Knowledgeable
• Release date: Jan 16, 2024

Book preview

Chapter 1: Neoclassical economics

In neoclassical economics, the production, consumption, and valuation (pricing) of goods and services are viewed as being driven by the supply and demand model. A theory that has received significant scrutiny in recent years.

Historically, neoclassical economics has dominated macroeconomics. It competed with new Keynesian economics as the new classical macroeconomics to explain macroeconomic phenomena from the 1970s until the 1990s, when it was recognized as a component of the new neoclassical synthesis alongside new Keynesianism. There have been numerous critiques of neoclassical economics, some of which have been incorporated into more recent versions of neoclassical theory while others continue to exist as separate fields.

Thorstein Veblen coined the term in his 1900 article Preconceptions of Economic Science, in which he compared marginalists in the tradition of Alfred Marshall et al. to members of the Austrian School.

No attempt will be made to even render a verdict on the relative claims of the two or three major schools of economic theory, with the exception of the somewhat obvious conclusion that, for the purpose at hand, the so-called Austrian school is hardly distinguishable from the neoclassical, except in the different emphasis distribution. The divergence between the modernized classical views on the one hand and the historical and Marxist schools on the other is so great that it is impossible to examine the postulates of the latter under the same heading as the