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Author of the Wealth of Nations published in 1776 - the same year as the Declaration of American Independence.
The Classical School
The invisible hand - resources are allocated efficiently because people act in their own self-interest to supply goods that other people want to buy.
Author of The General Theory of Employment, Interest and Money. His ideas transformed economics in the 20th Century.
John Maynard Keynes
Prolonged recessions (e.g. the Great Depression of 1929 - 39), are caused by a lack of aggregate demand and the solution is for government to step in and stimulate the economy with government spending.
Professor of Economics at the University of Chicago. A firm believer in free markets and that increases in money supply are always and everywhere the cause of inflation.
Adaptive expectations - unemployment cannot be solved in the long-run by government spending. Government spending might reduce unemployment in the short run, but the resulting inflation means real wages will not have changed and workers will merely have suffered from 'money illusion' and there will be a return to the natural rate of unemployment in the long run.
This Italian economist gives his name to a type of efficiency where it is not possible to make one person better off without making another worse off.
Being Pareto Efficient means producting on the production possibility frontier. All firms are in long-run equilibrium, and in perfect competition.
Mrs Thatcher (the UK prime Minister 1979-90) slammed down his book and said "this is what we believe"! This free market thinker thought government spending would lead us onto the Road to Serfdom.
Friedrich von Hayek.
The Austrian School
Political freedom and economic freedom are one and the same.
The economist who drew all those supply and demand diagrams, developed the model of perfect competion and made you calculate all those elasticity calculations. The definitions of short and long run are also his. J.M. Keynes was his student.
The Neo-Classical school
Building on the work of Milton Friedman - workers don't experience money illusion - in fact they have 'rational expectations' and anticipate inflation. Thus inflation is instant when governments pump money into the economy and the short-run pphillips curve is vertical.
The New Classical School
He gave us the law of comparative advantage. This Victorian economist and member of parliament helped construct a theoretical proof that showed free trade between countries was beneficial to all.
The Classical School
"Workers of the world unite, you have nothing to lose but your chains". His writings inspired revolutionaries all over the world, yet he died in poverty in london in 1888.
Das Capital, in three volumes, lays out a critique of capitalism and a theory of the history based on the idea of class struggle.
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