theory. sha

8/2/2019 Theory. Sha

1/37

A

Anti-classical or backing theory

Another issue associated with classical political economy is the anti-classical hypothesis

of money, or "backing theory". The backing theory argues that the value of money isdetermined by the assets and liabilities of the issuing agency. Unlike the QuantityTheory of classical political economy, the backing theory argues that issuing authoritiescan issue money without causing inflation so long as the money issuer has sufficientassets to cover redemptions. There are very few backing theorists, making quantitytheory the dominant theory explaining inflation.

B

'Big-push' Theory

This theory is an investment theory which stresses the conditions of take-off. Theargumentation is quite similar to the balanced growth theory but emphasis is put on theneed for a big push. The investments should be of a relatively high minimum in order toreap the benefits of external economies. Only investments in big complexes will result insocial benefits exceeding social costs. High priority is given to infrastructuraldevelopment and industry, and this emphasis will lead to governmental developmentplanning and influence.

Binary economics

Binary economics is a heterodox theory of economics that endorses both privateproperty and a free market but proposes significant reforms to the banking system. Theaim of binary economics is to ensure that all individuals receive income from their ownindependent capital estate, using interest-free loans issued by a central bank topromote the spread of employee-owned firms. These loans are intended to: halveinfrastructure improvement costs, reduce business startup costs, and widen stockownership.

Bottom of the pyramid

In economics, the bottom of the pyramid is the largest, but poorest socio-economicgroup. In global terms, this is the 2.5 billion people who live on less than $2.50 perday.[1]The phrase bottom of the pyramid is used in particular by people developingnew models of doing business that deliberately target that demographic, often usingnew technology. This field is also often referred to as the "Base of the Pyramid" or justthe "BoP".

Buffer theory
http://en.wikipedia.org/wiki/Heterodox_economicshttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Private_propertyhttp://en.wikipedia.org/wiki/Private_propertyhttp://en.wikipedia.org/wiki/Free_markethttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Central_bankhttp://en.wikipedia.org/wiki/ESOPhttp://en.wikipedia.org/wiki/Infrastructurehttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Socio-economic_grouphttp://en.wikipedia.org/wiki/Socio-economic_grouphttp://en.wikipedia.org/wiki/Bottom_of_the_pyramid#cite_note-0http://en.wikipedia.org/wiki/Bottom_of_the_pyramid#cite_note-0http://en.wikipedia.org/wiki/Bottom_of_the_pyramid#cite_note-0http://en.wikipedia.org/wiki/Bottom_of_the_pyramid#cite_note-0http://en.wikipedia.org/wiki/Socio-economic_grouphttp://en.wikipedia.org/wiki/Socio-economic_grouphttp://en.wikipedia.org/wiki/Stockhttp://en.wikipedia.org/wiki/Infrastructurehttp://en.wikipedia.org/wiki/ESOPhttp://en.wikipedia.org/wiki/Central_bankhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Free_markethttp://en.wikipedia.org/wiki/Private_propertyhttp://en.wikipedia.org/wiki/Private_propertyhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Heterodox_economics


2/37

In the late 1950s a number of European countries (most notably West Germany andFrance) decided on a migration policy known as the Buffer theory.

Owing to rapid economic recovery in the post WWII period (aided by the AmericanMarshall plan) there were many more job vacancies than people who were available or

becoming available in the workforce to fill them. To resolve this situation they decided to"import" workers from the southern Mediterranean basin (including North Africa) on atemporary capacity to fill this labour shortfall.

C

CalmforsDriffill hypothesis

The CalmforsDriffill hypothesis is a macroeconomic theory in labour economics thatstates that there is a non-linear relationship between the degree of collective bargainingin an economy and the level of unemployment. Specifically, it states that the relationshipis roughly that of an 'inverted U': as trade union size increases from nil, unemploymentincreases, and then falls as unions begin to exercise monopoly power. It was advancedby Lars Calmfors and John Driffill in their 1988 paper Bargaining structure, corporatismand macroeconomic performance.

The rationale is related to Mancur Olson's idea, from The Rise and Decline of Nations,that organised interests are at their most harmful when they do not internalise significantamounts of the costs they impose on society, but become less harmful as their interestbecomes encompassing enough to suffer the costs

Causal decision theory

Causal decision theory is a school of thought within decision theory which maintainsthat the expected utility of actions should be evaluated with respect to their potentialcausal consequences. It contrasts with evidential decision theory, which recommendsthose actions that, conditional on having been performed, will make the actor have thehappiest expectations about the outcome.

Choice theory

The term choice theoryis the work of William Glasser, MD, author of the book sonamed, and is the culmination of some 50 years of theory and practice in psychologyand counseling. Choice Theory posits that behavior is central to our existence and isdriven by five genetically driven needs, similar to those of Abraham Maslow:

Survival(food, clothing, shelter, breathing, personal safety and others)

And four fundamental psychological needs:
http://en.wikipedia.org/wiki/West_Germanyhttp://en.wikipedia.org/wiki/Marshall_Planhttp://en.wikipedia.org/wiki/Mediterraneanhttp://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/Labour_economicshttp://en.wikipedia.org/wiki/Collective_bargaininghttp://en.wikipedia.org/wiki/Inverted_Uhttp://en.wikipedia.org/wiki/Trade_unionhttp://en.wikipedia.org/wiki/Monopolyhttp://en.wikipedia.org/wiki/Lars_Calmforshttp://en.wikipedia.org/wiki/John_Driffillhttp://en.wikipedia.org/wiki/Mancur_Olsonhttp://en.wikipedia.org/wiki/Decision_theoryhttp://en.wikipedia.org/wiki/Expected_utilityhttp://en.wikipedia.org/wiki/Evidential_decision_theoryhttp://en.wikipedia.org/wiki/William_Glasserhttp://en.wikipedia.org/wiki/Doctor_of_Medicinehttp://en.wikipedia.org/wiki/Psychologyhttp://en.wikipedia.org/wiki/Counselinghttp://en.wikipedia.org/wiki/Abraham_Maslowhttp://en.wikipedia.org/wiki/Foodhttp://en.wikipedia.org/wiki/Foodhttp://en.wikipedia.org/wiki/Abraham_Maslowhttp://en.wikipedia.org/wiki/Counselinghttp://en.wikipedia.org/wiki/Psychologyhttp://en.wikipedia.org/wiki/Doctor_of_Medicinehttp://en.wikipedia.org/wiki/William_Glasserhttp://en.wikipedia.org/wiki/Evidential_decision_theoryhttp://en.wikipedia.org/wiki/Expected_utilityhttp://en.wikipedia.org/wiki/Decision_theoryhttp://en.wikipedia.org/wiki/Mancur_Olsonhttp://en.wikipedia.org/wiki/John_Driffillhttp://en.wikipedia.org/wiki/Lars_Calmforshttp://en.wikipedia.org/wiki/Monopolyhttp://en.wikipedia.org/wiki/Trade_unionhttp://en.wikipedia.org/wiki/Inverted_Uhttp://en.wikipedia.org/wiki/Collective_bargaininghttp://en.wikipedia.org/wiki/Labour_economicshttp://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/Mediterraneanhttp://en.wikipedia.org/wiki/Marshall_Planhttp://en.wikipedia.org/wiki/West_Germany


3/37

Belonging/connecting/love Power/significance/competence Freedom/autonomy, and Fun/learning

Classical test theory

Classical test theory is a body of related psychometric theory that predict outcomes ofpsychological testing such as the difficulty of items or the ability of test-takers. Generallyspeaking, the aim of classical test theory is to understand and improve the reliability ofpsychological tests.

Classical theory of growth and stagnation

Classical economics refers to work done by a group of economists in the eighteenth andnineteenth centuries. The theories developed mainly focused on the way marketeconomies functioned. Classical Economics study mainly concentrates on the dynamicsof economic growth.

The generalized classical theory on growth and stagnation is a combination of thecontributions of Adam Smith, David Ricardo and Robert Malthus. The theory was puttogether by combining the common stands of thought, within the individual growththeories, of these renowned classical economists. To understand the generalizedclassical theory of growth and stagnation, let us first look into the individual theoriespropagated by each of the three economists in detail.

Cluster theory

Cluster theory is a theory of strategy.

Alfred Marshall, in his book Principles of Economics, published in 1890, firstcharacterised clusters as a "concentration of specialised industries in particularlocalities" that he termed industrial districts.

Coasian solution

A Coasian Solution, named after the economist Ronald Coase, is an economicssolution resulting from the use of the Coase Theorem to achieve economic efficiency inthe presence of externalities without government intervention..

Cobweb model

The cobweb model or cobweb theory is an economic model that explains why pricesmight be subject to periodic fluctuations in certain types of markets. It describes cyclicalsupply and demand in a market where the amount produced must be chosen before
http://en.wikipedia.org/wiki/Lovehttp://en.wikipedia.org/wiki/Lovehttp://en.wikipedia.org/wiki/Power_%28sociology%29http://en.wikipedia.org/wiki/Libertyhttp://en.wikipedia.org/wiki/Psychometrichttp://en.wikipedia.org/wiki/Test_%28student_assessment%29http://en.wikipedia.org/wiki/Reliability_%28psychometric%29http://en.wikipedia.org/wiki/Classical_economicshttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Economic_stagnationhttp://en.wikipedia.org/wiki/Adam_Smithhttp://en.wikipedia.org/wiki/David_Ricardohttp://en.wikipedia.org/wiki/Robert_Malthushttp://en.wikipedia.org/wiki/Strategyhttp://en.wikipedia.org/wiki/Alfred_Marshallhttp://en.wikipedia.org/wiki/Clusterhttp://en.wikipedia.org/wiki/Industrial_districthttp://en.wikipedia.org/wiki/Ronald_Coasehttp://en.wikipedia.org/wiki/Coase_Theoremhttp://en.wikipedia.org/wiki/Externalitieshttp://en.wikipedia.org/wiki/Economic_modelhttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Markethttp://en.wikipedia.org/wiki/Supply_and_demandhttp://en.wikipedia.org/wiki/Production,_costs,_and_pricinghttp://en.wikipedia.org/wiki/Production,_costs,_and_pricinghttp://en.wikipedia.org/wiki/Supply_and_demandhttp://en.wikipedia.org/wiki/Markethttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Economic_modelhttp://en.wikipedia.org/wiki/Externalitieshttp://en.wikipedia.org/wiki/Coase_Theoremhttp://en.wikipedia.org/wiki/Ronald_Coasehttp://en.wikipedia.org/wiki/Industrial_districthttp://en.wikipedia.org/wiki/Clusterhttp://en.wikipedia.org/wiki/Alfred_Marshallhttp://en.wikipedia.org/wiki/Strategyhttp://en.wikipedia.org/wiki/Robert_Malthushttp://en.wikipedia.org/wiki/David_Ricardohttp://en.wikipedia.org/wiki/Adam_Smithhttp://en.wikipedia.org/wiki/Economic_stagnationhttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Classical_economicshttp://en.wikipedia.org/wiki/Reliability_%28psychometric%29http://en.wikipedia.org/wiki/Test_%28student_assessment%29http://en.wikipedia.org/wiki/Psychometrichttp://en.wikipedia.org/wiki/Libertyhttp://en.wikipedia.org/wiki/Power_%28sociology%29http://en.wikipedia.org/wiki/Love


4/37


5/37

In economics,contract theory studies how economic actors can and do constructcontractual arrangements, generally in the presence of asymmetric information.Because of its connections with both agency and incentives, contract theory is oftencategorized within a field known as Law and economics. One prominent application of itis the design of optimal schemes of managerial compensation. In the field of economics,

the first formal treatment of this topic was given by Kenneth Arrow in the 1960s.

Cost-of-production theory of value

In economics, the cost-of-production theory of value is the theory that the price of anobject or condition is determined by the sum of the cost of the resources that went intomaking it. The cost can compose any of the factors of production (including labor,capital, or land) and taxation.

Costs push theory

The cost push theory of economics is the theory that inflation occurs when producersraise prices to meet increased cost.

Critical minimum effort theory

The critical minimum effort theory has been given by Harvey Leibenstein, in his bookEconomic Backwardness and Economic Growth. This theory relates to overpopulatedand underdeveloped or developing nations such as India and Indonesia.This theory isbased on Malthusian theory of population.

Cultural Theory of risk

The Cultural Theory of risk, often referred to simply as Cultural Theory (with capitalletters; not to be confused with culture theory), consists of a conceptual framework andan associated body of empirical studies that seek to explain societal conflict over risk.Whereas other theories of risk perception stress economic and cognitive influences,Cultural Theory asserts that structures of social organization endow individuals withperceptions that reinforce those structures in competition against alternative ones.Originating in the work of anthropologist Mary Douglas and political scientist AaronWildavsky, Cultural Theory has given rise to a diverse set of research programs that

span multiple social science disciplines and that have in recent years been used toanalyze policymaking conflicts generally.

Cyclical theory

The cyclical theory refers to a model used by historian Arthur Schlesinger to attempt toexplicate the fluctuations in politics throughout American History. Liberalism and
http://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Asymmetric_informationhttp://en.wikipedia.org/wiki/Agency_%28law%29http://en.wikipedia.org/wiki/Law_and_economicshttp://en.wikipedia.org/w/index.php?title=Managerial_compensation&action=edit&redlink=1http://en.wikipedia.org/wiki/Kenneth_Arrowhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Factors_of_productionhttp://en.wikipedia.org/wiki/Effect_of_taxes_and_subsidies_on_pricehttp://www.enotes.com/topic/Economicshttp://www.enotes.com/topic/Inflationhttp://en.wikipedia.org/wiki/Harvey_Leibensteinhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Culture_theoryhttp://en.wikipedia.org/wiki/Risk_perceptionhttp://en.wikipedia.org/wiki/Mary_Douglashttp://en.wikipedia.org/wiki/Aaron_Wildavskyhttp://en.wikipedia.org/wiki/Aaron_Wildavskyhttp://en.wikipedia.org/wiki/Historianhttp://en.wikipedia.org/wiki/Arthur_M._Schlesinger,_Sr.http://en.wikipedia.org/wiki/Politicshttp://en.wikipedia.org/wiki/American_Historyhttp://en.wikipedia.org/wiki/Liberalismhttp://en.wikipedia.org/wiki/Liberalismhttp://en.wikipedia.org/wiki/American_Historyhttp://en.wikipedia.org/wiki/Politicshttp://en.wikipedia.org/wiki/Arthur_M._Schlesinger,_Sr.http://en.wikipedia.org/wiki/Historianhttp://en.wikipedia.org/wiki/Aaron_Wildavskyhttp://en.wikipedia.org/wiki/Aaron_Wildavskyhttp://en.wikipedia.org/wiki/Mary_Douglashttp://en.wikipedia.org/wiki/Risk_perceptionhttp://en.wikipedia.org/wiki/Culture_theoryhttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Harvey_Leibensteinhttp://www.enotes.com/topic/Inflationhttp://www.enotes.com/topic/Economicshttp://en.wikipedia.org/wiki/Effect_of_taxes_and_subsidies_on_pricehttp://en.wikipedia.org/wiki/Factors_of_productionhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Kenneth_Arrowhttp://en.wikipedia.org/w/index.php?title=Managerial_compensation&action=edit&redlink=1http://en.wikipedia.org/wiki/Law_and_economicshttp://en.wikipedia.org/wiki/Agency_%28law%29http://en.wikipedia.org/wiki/Asymmetric_informationhttp://en.wikipedia.org/wiki/Economics


6/37

conservatism are rooted in the national mood that shows a continuing shift in nationalinvolvement between public purpose and private interest. Each of these cycles includesa phase of dominant public interest, a transition phase, and a phase of prevalent privateinterest.

D

Decision field theory

Decision Field Theory (DFT), is a dynamic - cognitive approach to human decisionmaking. It is a cognitive model that describes how people make decisions rather than arational model that prescribes what people should do. It is also a dynamic model ofdecision making rather than a static model, because it describes how a person'spreferences evolve across time until a decision is reached rather than assuming a fixedstate of preference. The preference evolution process is mathematically represented asa stochastic process called a diffusion process. It is used to predict how humans make

decisions under uncertainty, how decisions change under time pressure, and howchoice context changes preferences. This model can be used to predict not only thechoices that are made but also decision or response times. The Decision Field Theory(DFT) was published by Jerome R. Busemeyer and James T. Townsend in 1993 [1]. TheDFT has been shown to account for many puzzling findings regarding human choicebehavior including violations of stochastic dominance, violations of strong stochastictransitivity, violations of independence between alternatives, serial position effects onpreference, speed accuracy tradeoff effects, inverse relation between probability anddecision time, changes in decisions under time pressure, as well as preferencereversals between choices and prices. The DFT also offers a bridge to neuroscience.Recently, the authors of decision field theory also have begun exploring a new

theoretical direction called Quantum Cognition.

Decision theory

Decision theory in economics, psychology, philosophy, mathematics, and statistics isconcerned with identifying the values, uncertainties and other issues relevant in a givendecision, its rationality, and the resulting optimal decision. It is closely related to the fieldof game theory as to interactions of agents with at least partially conflicting interestswhose decisions affect each other.

Demand Theory

A theory relating to the relationship between consumer demand for goods and servicesand their prices. Demand theory forms the basis for the demand curve, which relatesconsumer desire to the amount of goods available. As more of a good or service isavailable, demand drops and therefore so does the equilibrium price.

Demand theory is one of the core theories of microeconomics. It aims to answer basicquestions about how badly people want things, and how demand is impacted by income
http://en.wikipedia.org/wiki/Conservatismhttp://en.wikipedia.org/wiki/Cognitive_modelhttp://en.wikipedia.org/wiki/Rationalhttp://en.wikipedia.org/wiki/Dynamic_modelhttp://en.wikipedia.org/wiki/Decision_makinghttp://en.wikipedia.org/wiki/Diffusion_processhttp://en.wikipedia.org/wiki/Response_timehttp://en.wikipedia.org/wiki/Decision_field_theory#cite_note-0http://en.wikipedia.org/wiki/Decision_field_theory#cite_note-0http://en.wikipedia.org/wiki/Stochastic_dominancehttp://en.wikipedia.org/wiki/Transitive_relationhttp://en.wikipedia.org/wiki/Serial_position_effecthttp://en.wikipedia.org/wiki/Neurosciencehttp://en.wikipedia.org/wiki/Quantum_Cognitionhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Psychologyhttp://en.wikipedia.org/wiki/Philosophyhttp://en.wikipedia.org/wiki/Mathematicshttp://en.wikipedia.org/wiki/Statisticshttp://en.wikipedia.org/wiki/Valuehttp://en.wikipedia.org/wiki/Uncertaintyhttp://en.wikipedia.org/wiki/Decision_makinghttp://en.wikipedia.org/wiki/Rational_choicehttp://en.wikipedia.org/wiki/Optimal_decisionhttp://en.wikipedia.org/wiki/Game_theoryhttp://en.wikipedia.org/wiki/Agent_%28economics%29http://en.wikipedia.org/wiki/Agent_%28economics%29http://en.wikipedia.org/wiki/Game_theoryhttp://en.wikipedia.org/wiki/Optimal_decisionhttp://en.wikipedia.org/wiki/Rational_choicehttp://en.wikipedia.org/wiki/Decision_makinghttp://en.wikipedia.org/wiki/Uncertaintyhttp://en.wikipedia.org/wiki/Valuehttp://en.wikipedia.org/wiki/Statisticshttp://en.wikipedia.org/wiki/Mathematicshttp://en.wikipedia.org/wiki/Philosophyhttp://en.wikipedia.org/wiki/Psychologyhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Quantum_Cognitionhttp://en.wikipedia.org/wiki/Neurosciencehttp://en.wikipedia.org/wiki/Serial_position_effecthttp://en.wikipedia.org/wiki/Transitive_relationhttp://en.wikipedia.org/wiki/Stochastic_dominancehttp://en.wikipedia.org/wiki/Decision_field_theory#cite_note-0http://en.wikipedia.org/wiki/Response_timehttp://en.wikipedia.org/wiki/Diffusion_processhttp://en.wikipedia.org/wiki/Decision_makinghttp://en.wikipedia.org/wiki/Dynamic_modelhttp://en.wikipedia.org/wiki/Rationalhttp://en.wikipedia.org/wiki/Cognitive_modelhttp://en.wikipedia.org/wiki/Conservatism


7/37

levels and satisfaction (utility). Based on the perceived utility of goods and services byconsumers, companies adjust the supply available and the prices charged.

Demand-pull theory

In economics, the demand-pull theory is the theory that inflation occurs when demandfor goods and services exceeds existing supplies. According to the demand pull theory,there is a range of effects on innovative activity driven by changes in expected demand,the competitive structure of markets, and factors which affect the valuation of newproducts or the ability of firms to realize economic benefits.

Dependency theory

World systems theory builds on but also parts from the proposition of dependencytheory. Fernando Henrique Cardoso described the main tenets of the dependencytheories as follows:

there is a financial and technological penetration of the periphery and semi-periphery countries by the developed capitalist core countries

this produces an unbalanced economic structure within the peripheral societiesand among them and the centers

this leads to limitations upon self-sustained growth in the periphery this favors the appearance of specific patterns of class relations these require modifications in the role of the state to guarantee the functioning of

the economy and the political articulation of a society, which contains, withinitself, foci of inarticulateness and structural imbalance

Dependency and world system theory propose that the poverty and backwardness ofpoor countries are caused by their peripheral position in the international division oflabor. Since the capitalist world system evolved, the distinction among the central andthe peripheral nations has grown.

In recognizing a tripartite pattern in division of labor, world-systems analysis criticizeddependency theory with its bimodal system of only cores and peripheries.

Developmentalism

Developmentalism is an economic theory which states that the best way for Third

World countries to develop is through fostering a strong and varied internal market andto impose high tariffs on imported goods.
http://en.wikipedia.org/wiki/Dependency_theoryhttp://en.wikipedia.org/wiki/Dependency_theoryhttp://en.wikipedia.org/wiki/Fernando_Henrique_Cardosohttp://en.wikipedia.org/wiki/Periphery_countrieshttp://en.wikipedia.org/wiki/Semi-periphery_countrieshttp://en.wikipedia.org/wiki/Semi-periphery_countrieshttp://en.wikipedia.org/wiki/Core_countrieshttp://en.wikipedia.org/wiki/Povertyhttp://en.wikipedia.org/wiki/Division_of_laborhttp://en.wikipedia.org/wiki/Division_of_laborhttp://en.wikipedia.org/wiki/Dependency_theoryhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Third_Worldhttp://en.wikipedia.org/wiki/Third_Worldhttp://en.wikipedia.org/wiki/Third_Worldhttp://en.wikipedia.org/wiki/Third_Worldhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Dependency_theoryhttp://en.wikipedia.org/wiki/Division_of_laborhttp://en.wikipedia.org/wiki/Division_of_laborhttp://en.wikipedia.org/wiki/Povertyhttp://en.wikipedia.org/wiki/Core_countrieshttp://en.wikipedia.org/wiki/Semi-periphery_countrieshttp://en.wikipedia.org/wiki/Semi-periphery_countrieshttp://en.wikipedia.org/wiki/Periphery_countrieshttp://en.wikipedia.org/wiki/Fernando_Henrique_Cardosohttp://en.wikipedia.org/wiki/Dependency_theoryhttp://en.wikipedia.org/wiki/Dependency_theory


8/37

Diamond model

The Porter diamond

The diamond model is an economical model developed by Michael Porter in his bookThe Competitive Advantage of Nations, where he published his theory of why particularindustries become competitive in particular locations. Afterwards, this model has beenexpanded by other scholars.

Dualism Theories

Dualism theories assume a split of economic and social structures of different sectorsso that they differ in organization, level of development, and goal structures. Usually,the concept of economic dualism (BOEKE 1) differentiates between two sectors ofeconomy:

the traditional subsistence sector consists of small-scale agriculture, handicraft and petty trade, has a high degree of labourintensity but low capital intensity and little division of labour;

the modern sector of capital-intensive industry and plantationagriculture produces for the world market with a capital-intensivemode of production with a high division of labour.

The two sectors have little relation and interdependence and develop each according toits own pattern. The modern sector can be considered an economic enclave of industrialcountries, and its multipli-cator and growth effects will benefit the industrial countries buthave little effect on the internal market.

Dumb Agent Theory

This is the theory that my thesis is based on. It is a theory that has been observed timeand time again, although never proven per se. I am applying this theory to a futuresmarket, which I believe can be used as an indicator; in my case, for Foreign DirectInvestment.

E
http://en.wikipedia.org/wiki/Michael_Porterhttp://en.wikipedia.org/wiki/File:The_Porter_Diamond.svghttp://en.wikipedia.org/wiki/Michael_Porter


9/37

Eclectic paradigm

The eclectic paradigm is a theory in economics and is also known as the OLI-Model

or OLI-Framework. It is a further development of the theory of internalization and

published by John H. Dunning in 1980.

The theory of internalization itself is based on the transaction cost theory this theory

says that transactions are made within an institution if the transaction costs on the free

market are higher than the internal costs. This process is called internalization.

Economic liberalism

Economic liberalism is the ideological belief in giving all people economic freedom,and as such granting people with more basis to control their own lives and make theirown mistakes. It is an economic philosophy that ideally supports and promotesindividual liberty and choice in economic matters and private property in the means ofproduction. Although economic liberalism can be supportive of government regulation toa certain degree, it tends to oppose government intervention in the free market when itinhibits free trade and open competition, however it can also lead to the support ofgovernment intervention in order to remove private monopoly, as this limits the liberty ofthe poor. Economic liberalism emphasizes that people should make their own choiceswith their money, so long as it doesn't infringe on the liberty of others.

Economic problem

The economic problem, sometimes called the basic, central or fundamental economicproblem, is one of the fundamental economic theories in the operation of anyeconomy. It asserts that there is scarcity, or that the finite resources available areinsufficient to satisfy all human wants and needs. The problem then becomeshow to determine what is to be produced and how the factors of production (suchas capital and labor) are to be allocated. Economics revolves around methodsand possibilities of solving the economic problem.

In short, the economic problem is the choice one must make, arising out of limitedmeans and unlimited wants.

Endogenous Growth Theory

An economic theory which argues that economic growth is generated from within a

system as a direct result of internal processes. More specifically, the theory notes that

the enhancement of a nation's human capital will lead to economic growth by means

of the development of new forms of technology and efficient and effective means of

production.
http://en.wikipedia.org/wiki/John_H._Dunninghttp://en.wikipedia.org/wiki/Transaction_costhttp://en.wikipedia.org/wiki/Economic_freedomhttp://en.wikipedia.org/wiki/Libertyhttp://en.wikipedia.org/wiki/Private_propertyhttp://en.wikipedia.org/wiki/Free_markethttp://en.wikipedia.org/wiki/Monopolyhttp://en.wikipedia.org/wiki/Economic_theoryhttp://en.wikipedia.org/wiki/Economyhttp://en.wikipedia.org/wiki/Scarcityhttp://en.wikipedia.org/wiki/Wantshttp://en.wikipedia.org/wiki/Factors_of_productionhttp://en.wikipedia.org/wiki/Capital_%28economics%29http://en.wikipedia.org/wiki/Labor_%28economics%29http://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Labor_%28economics%29http://en.wikipedia.org/wiki/Capital_%28economics%29http://en.wikipedia.org/wiki/Factors_of_productionhttp://en.wikipedia.org/wiki/Wantshttp://en.wikipedia.org/wiki/Scarcityhttp://en.wikipedia.org/wiki/Economyhttp://en.wikipedia.org/wiki/Economic_theoryhttp://en.wikipedia.org/wiki/Monopolyhttp://en.wikipedia.org/wiki/Free_markethttp://en.wikipedia.org/wiki/Private_propertyhttp://en.wikipedia.org/wiki/Libertyhttp://en.wikipedia.org/wiki/Economic_freedomhttp://en.wikipedia.org/wiki/Transaction_costhttp://en.wikipedia.org/wiki/John_H._Dunning


10/37

Evidential decision theory

Evidential decision theory is a school of thought within decision theory according towhich the best action is the one which, conditional on your having chosen it, gives youthe best expectations for the outcome. It contrasts with causal decision theory, which

requires a causal connection between your actions and the desirable outcome.

Expected utility hypothesis

In economics, game theory, and decision theory the expected utility hypothesis is atheory of utility in which "betting preferences" of people with regard to uncertainoutcomes (gambles) are represented by a function of the payouts (whether in money orother goods), the probabilities of occurrence, risk aversion, and the different utility ofthe same payout to people with different assets or personal preferences. This theoryhas proved useful to explain some popular choices that seem to contradict theexpected value criterion (which takes into account only the sizes of the payouts and the

probabilities of occurrence), such as occur in the contexts of gambling and insurance.Daniel Bernoulli initiated this theory in 1738. Until the mid-twentieth century, thestandard term for the expected utility was the moral expectation, contrasted with"mathematical expectation" for the expected value.

The von NeumannMorgenstern utility theorem provides necessary and sufficient"rationality" axioms under which the expected utility hypothesis holds.

External Trade Theories

The structure of supply and demand in industrialized and developing countries is suchthat industrialized countries are able to reap the benefits from international trade. Thistransfer of resources makes development impossible, and these unequal traderelations are seen as the reasons for underdevelopment.

F

Fed model

The "Fed model" is a theory of equity valuation that has found broad application in theinvestment community. The model compares the stock marketsearnings yield (E/P) tothe yield on long-term government bonds. In its strongest form the Fed model statesthat bond and stock market are in equilibrium, and fairly valued, when the one yearforward looking earnings yield equals the 10-year Treasury note yield (Y10):
http://en.wikipedia.org/wiki/Decision_theoryhttp://en.wikipedia.org/wiki/Causal_decision_theoryhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Game_theoryhttp://en.wikipedia.org/wiki/Decision_theoryhttp://en.wikipedia.org/wiki/Utilityhttp://en.wikipedia.org/wiki/Risk_aversionhttp://en.wikipedia.org/wiki/Utilityhttp://en.wikipedia.org/wiki/Expected_valuehttp://en.wikipedia.org/wiki/Daniel_Bernoullihttp://en.wikipedia.org/wiki/Von_Neumann%E2%80%93Morgenstern_utility_theoremhttp://en.wikipedia.org/wiki/Von_Neumann%E2%80%93Morgenstern_utility_theoremhttp://en.wikipedia.org/wiki/Von_Neumann%E2%80%93Morgenstern_utility_theoremhttp://en.wikipedia.org/wiki/Theoryhttp://en.wikipedia.org/wiki/Equity_valuationhttp://en.wikipedia.org/wiki/Earnings_yieldhttp://en.wikipedia.org/wiki/Earnings_yieldhttp://en.wikipedia.org/wiki/Government_bondshttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Stock_markethttp://en.wikipedia.org/wiki/Government_bondshttp://en.wikipedia.org/wiki/Earnings_yieldhttp://en.wikipedia.org/wiki/Equity_valuationhttp://en.wikipedia.org/wiki/Theoryhttp://en.wikipedia.org/wiki/Von_Neumann%E2%80%93Morgenstern_utility_theoremhttp://en.wikipedia.org/wiki/Daniel_Bernoullihttp://en.wikipedia.org/wiki/Expected_valuehttp://en.wikipedia.org/wiki/Utilityhttp://en.wikipedia.org/wiki/Risk_aversionhttp://en.wikipedia.org/wiki/Utilityhttp://en.wikipedia.org/wiki/Decision_theoryhttp://en.wikipedia.org/wiki/Game_theoryhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Causal_decision_theoryhttp://en.wikipedia.org/wiki/Decision_theory


11/37

The model is often used as a simple tool to measure attractiveness of equity, and tohelp allocating funds between equity and bonds. When for example the equity earnings

yield is above the government bond yield, investors should shift funds from bonds intoequity. The Fed model was so named by Ed Yardeni, at Deutsche Morgan Grenfell,based on a statement made in the Humphrey-Hawkins report of July 22, 1997 issuedby the Federal Reserve that warned:

changes in this ratio [P/E of the S&P 500 index] have often been inversely

related to changes in the long-term Treasury yields, but this year's stock price

gains were not matched by a significant net decline in interest rates. As a result,

the yield on ten-year Treasury notes now exceeds the ratio of twelve-month-

ahead earnings to prices by the largest amount since 1991, when earnings were

depressed by the economic slowdown.

Fisher hypothesis

In economics, the Fisher hypothesis (sometimes Fisher parity) is the proposition byIrving Fisher that the real interest rate is independent of monetary measures, especiallythe nominal interest rate. The Fisher equation is

This means, the real interest rate ( ) equals the nominal interest rate ( ) minusexpected rate of inflation ( ). Here all the rates are continuously compounded. Forsimple rates, the Fisher equation takes form of

If is assumed to be constant, must rise when rises. Fisher Effect: The one forone adjustment of the nominal interest rate to the expected inflation rate.

To understand the relationship between money, inflation and interest rates it isimportant to understand nominal interest rate and real interest rate. The nominal interest

rate is the interest rate you hear about at your bank. If you have a savings account, forinstance, the nominal interest rate tells you how fast the number of dollars in youraccount will rise over time. The real interest rate corrects the nominal rate for the effectof inflation in order to tell you how fast the purchasing power of your savings accountwill raise over time. An easy estimation of the real interest rate is the nominal interestrate minus the expected inflation rate (Note that this estimate is unwise when looking atcompounded savings.)
http://en.wikipedia.org/wiki/Equity_%28finance%29http://en.wikipedia.org/wiki/Federal_Reservehttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Irving_Fisherhttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Real_versus_nominal_value_%28economics%29http://en.wikipedia.org/wiki/Fisher_equationhttp://en.wikipedia.org/wiki/Real_interest_ratehttp://en.wikipedia.org/wiki/Nominal_interest_ratehttp://en.wikipedia.org/w/index.php?title=Expected_rate_of_inflation&action=edit&redlink=1http://en.wikipedia.org/wiki/Inflation_ratehttp://en.wikipedia.org/wiki/Savings_deposithttp://en.wikipedia.org/wiki/Purchasing_powerhttp://en.wikipedia.org/wiki/Purchasing_powerhttp://en.wikipedia.org/wiki/Savings_deposithttp://en.wikipedia.org/wiki/Inflation_ratehttp://en.wikipedia.org/w/index.php?title=Expected_rate_of_inflation&action=edit&redlink=1http://en.wikipedia.org/wiki/Nominal_interest_ratehttp://en.wikipedia.org/wiki/Real_interest_ratehttp://en.wikipedia.org/wiki/Fisher_equationhttp://en.wikipedia.org/wiki/Real_versus_nominal_value_%28economics%29http://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Irving_Fisherhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Federal_Reservehttp://en.wikipedia.org/wiki/Equity_%28finance%29


12/37

Real interest rate = Nominal Interest Rate - Expected Inflation Rate

Nominal Interest Rate = Real interest Rate + Expected Inflation Rate

If inflation permanently rises from a constant level, let's say 4%/yr., to a constant level,

say 8%/yr., that currency's interest rate would eventually catch up with the higherinflation, rising by 4 points a year from their initial level. These changes leave the realreturn on that currency unchanged. The Fisher Effect is an evidence that in the long-run, purely monetary developments will have no effect on that country's relative prices.

It has been contended that the Fisher hypothesis may break down in times of bothquantitative easing and financial sector recapitalisation.

First possession theory of property

The "first possession" theory of property holds that ownership of something is

justified simply by someone seizing it before someone else does. This contrasts with thelabor theory of property where something may become property only by applyingproductive labor to it, i.e. by making something out of the materials of nature.

Full employment

Diagram of macroeconomic circulation. LS LD is the full employment situation, one inwhich the rate of unemployment is zero or negative (corresponding to a labor shortfall).

Full employment, in macroeconomics, is the level of employment rates when there isno cyclical unemployment. It is defined by the majority of mainstream economists asbeing an acceptable level of natural unemployment above 0%, the discrepancy from 0%being due to non-cyclical types of unemployment. Unemployment above 0% is
http://en.wikipedia.org/wiki/Continuously_Compounded_Nominal_and_Real_Returnshttp://en.wikipedia.org/wiki/Continuously_Compounded_Nominal_and_Real_Returnshttp://en.wikipedia.org/wiki/Labor_theory_of_propertyhttp://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/Unemployment#cyclical_unemploymenthttp://en.wikipedia.org/wiki/Mainstream_economicshttp://en.wikipedia.org/wiki/Economistshttp://en.wikipedia.org/wiki/Types_of_unemploymenthttp://en.wikipedia.org/wiki/File:Circulation_in_macroeconomics.svghttp://en.wikipedia.org/wiki/Types_of_unemploymenthttp://en.wikipedia.org/wiki/Economistshttp://en.wikipedia.org/wiki/Mainstream_economicshttp://en.wikipedia.org/wiki/Unemployment#cyclical_unemploymenthttp://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/Labor_theory_of_propertyhttp://en.wikipedia.org/wiki/Continuously_Compounded_Nominal_and_Real_Returnshttp://en.wikipedia.org/wiki/Continuously_Compounded_Nominal_and_Real_Returns


13/37

advocated as necessary to control inflation, which has brought about the concept of theNon-Accelerating Inflation Rate of Unemployment (NAIRU); the majority of mainstreameconomists mean NAIRU when speaking of "full" employment.

G

Game theoryGame theory is a method of studying strategic decision making. More formally, it is "thestudy of mathematical models of conflict and cooperation between intelligent rationaldecision-makers." An alternative term suggested "as a more descriptive name for thediscipline" is interactivedecision theory. Game theory is mainly used in economics,political science, and psychology, and other, more prescribed sciences, like logic andbiology. The subject first addressed zero-sum games, such that one person's gainsexactly equal net losses of the other participant(s). Today, however, game theoryapplies to a wide range of class relations, and has developed into an umbrella term forthe logical side of science, to include both human and non-humans, like computers.

Classic uses include a sense of balance in numerous games, where each person hasfound or developed a tactic that cannot successfully better his results, given the otherapproach.

Generalizability theory

Generalizability theory, or G Theory, is a statistical framework for conceptualizing,investigating, and designing reliable observations. It is used to determine the reliability(i.e., reproducibility) of measurements under specific conditions. It is particularly usefulfor assessing the reliability of performance assessments. It was originally introduced inCronbach, L.J., Nageswari, R., & Gleser, G.C. (1963).

H

Hubbert peak theory

The Hubbert peak theory posits that for any given geographical area, from anindividual oil-producing region to the planet as a whole, the rate of petroleum productiontends to follow a bell-shaped curve. It is one of the primary theories on peak oil.

The Hubbert peak theory is based on the observation that the amount of oil under theground in any region is finite; therefore the rate of discovery which initially increasesquickly must reach a maximum and decline. In the US, oil extraction followed thediscovery curve after a time lag of 32 to 35 years. The theory is named after Americangeophysicist M. King Hubbert, who created a method of modeling the production curvegiven an assumed ultimate recovery volume.

I
http://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/NAIRUhttp://en.wikipedia.org/wiki/Decision_makinghttp://en.wikipedia.org/wiki/Mathematical_modelhttp://en.wikipedia.org/wiki/Rational_choice_theoryhttp://en.wikipedia.org/wiki/Decision_theoryhttp://en.wikipedia.org/wiki/Decision_theoryhttp://en.wikipedia.org/wiki/Zero-sum_gamehttp://en.wikipedia.org/wiki/Umbrella_termhttp://en.wikipedia.org/wiki/Observationhttp://en.wikipedia.org/wiki/Reliability_%28statistics%29http://en.wikipedia.org/wiki/Petroleumhttp://en.wikipedia.org/wiki/Logistic_distributionhttp://en.wikipedia.org/wiki/Peak_oilhttp://en.wikipedia.org/wiki/M._King_Hubberthttp://en.wikipedia.org/wiki/M._King_Hubberthttp://en.wikipedia.org/wiki/Peak_oilhttp://en.wikipedia.org/wiki/Logistic_distributionhttp://en.wikipedia.org/wiki/Petroleumhttp://en.wikipedia.org/wiki/Reliability_%28statistics%29http://en.wikipedia.org/wiki/Observationhttp://en.wikipedia.org/wiki/Umbrella_termhttp://en.wikipedia.org/wiki/Zero-sum_gamehttp://en.wikipedia.org/wiki/Decision_theoryhttp://en.wikipedia.org/wiki/Rational_choice_theoryhttp://en.wikipedia.org/wiki/Mathematical_modelhttp://en.wikipedia.org/wiki/Decision_makinghttp://en.wikipedia.org/wiki/NAIRUhttp://en.wikipedia.org/wiki/Inflation


14/37

Imperialism Theory

The imperialism theory explains the domination of underdeveloped areas byindustrialized countries as the consequence of different economic and technologicallevels and unequal power potential resulting from a different economic growth. The

consequence of the development of industrial capitalistic societies is a pressure forexpansion which may lead to military or political acquisition (colonies) or to maintainingeconomic dependence (developing countries). Different theories have their ownexplanation of the reason for the pressure for expansion but it is always seen as theresult of the inability to cope internally with the consequences of permanenttechnological innovation and their effects on the society.

Intergovernmentalismis an alternative theory of political integration, where power ininternational organizations is possessed by the member-states and decisions are madeby unanimity. Independent appointees of the governments or elected representativeshave solely advisory or implementation functions. Intergovernmentalism is used by most

international organizations today. An alternative method of decision-making ininternational organizations is supranationalism.

Invisible Hand.

In economics, invisible hand or invisible hand of the market is the term economistsuse to describe the self-regulating nature of the marketplace. This is a metaphor firstcoined by the economist Adam Smith. The exact phrase is used just three times in hiswritings, but has come to capture his important claim that by trying to maximize theirown gains in a free market, individual ambition benefits society, even if the ambitioushave no benevolent intentions.

Item response theory

In psychometrics,item response theory (IRT) also known as latent trait theory,strong true score theory, or modern mental test theory, is a paradigm for thedesign, analysis, and scoring of tests, questionnaires, and similar instrumentsmeasuring abilities, attitudes, or other variables. It is based on the application of relatedmathematical models to testing data. Because it is generally regarded as superior toclassical test theory, it is the preferred method for the development of high-stakes testssuch as the Graduate Record Examination (GRE) and Graduate Management

Admission Test (GMAT).

Iron law of wages

The Iron Law of Wages is a proposed law of economics that asserts that real wagesalways tend, in the long run, toward the minimum wage necessary to sustain the life ofthe worker. The theory was first named by Ferdinand Lassalle in the mid-nineteenth
http://en.wikipedia.org/wiki/Intergovernmentalismhttp://en.wikipedia.org/wiki/Intergovernmentalismhttp://en.wikipedia.org/wiki/Economisthttp://en.wikipedia.org/wiki/Metaphorhttp://en.wikipedia.org/wiki/Adam_Smithhttp://en.wikipedia.org/wiki/Invisible_hand#Other_uses_of_the_phrase_by_Smithhttp://en.wikipedia.org/wiki/Invisible_hand#Other_uses_of_the_phrase_by_Smithhttp://en.wikipedia.org/wiki/Psychometricshttp://en.wikipedia.org/wiki/Test_%28student_assessment%29http://en.wikipedia.org/wiki/Questionnairehttp://en.wikipedia.org/wiki/Measurementhttp://en.wikipedia.org/wiki/Mathematical_modelhttp://en.wikipedia.org/wiki/Datahttp://en.wikipedia.org/wiki/Classical_test_theoryhttp://en.wikipedia.org/wiki/High-stakes_testinghttp://en.wikipedia.org/wiki/Graduate_Record_Examinationhttp://en.wikipedia.org/wiki/Graduate_Management_Admission_Testhttp://en.wikipedia.org/wiki/Graduate_Management_Admission_Testhttp://en.wikipedia.org/wiki/Ferdinand_Lassallehttp://en.wikipedia.org/wiki/Ferdinand_Lassallehttp://en.wikipedia.org/wiki/Graduate_Management_Admission_Testhttp://en.wikipedia.org/wiki/Graduate_Management_Admission_Testhttp://en.wikipedia.org/wiki/Graduate_Record_Examinationhttp://en.wikipedia.org/wiki/High-stakes_testinghttp://en.wikipedia.org/wiki/Classical_test_theoryhttp://en.wikipedia.org/wiki/Datahttp://en.wikipedia.org/wiki/Mathematical_modelhttp://en.wikipedia.org/wiki/Measurementhttp://en.wikipedia.org/wiki/Questionnairehttp://en.wikipedia.org/wiki/Test_%28student_assessment%29http://en.wikipedia.org/wiki/Psychometricshttp://en.wikipedia.org/wiki/Invisible_hand#Other_uses_of_the_phrase_by_Smithhttp://en.wikipedia.org/wiki/Invisible_hand#Other_uses_of_the_phrase_by_Smithhttp://en.wikipedia.org/wiki/Adam_Smithhttp://en.wikipedia.org/wiki/Metaphorhttp://en.wikipedia.org/wiki/Economisthttp://en.wikipedia.org/wiki/Intergovernmentalism


15/37

century. Karl Marx and Friedrich Engels attribute the doctrine to Lassalle (notably inCritique of the Gotha Programme(1875), Marx), crediting the idea to Thomas Malthusin his work,An Essay on the Principle of Population, and the terminology to Goethe's"great, eternal iron laws" inDas Gttliche.

K

Keynesian Economics

An economic theory stating that active government intervention in the marketplace andmonetary policy is the best method of ensuring economic growth and stability.

A supporter of Keynesian economics believes it is the government's job to smooth outthe bumps in business cycles. Intervention would come in the form of governmentspending and tax breaks in order to stimulate the economy, and government spendingcuts and tax hikes in good times, in order to curb inflation.

Knowledge-based theory of the firm

The knowledge-based theory of the firm considers knowledge as the moststrategically significant resource of a firm. Its proponents argue that becauseknowledge-based resources are usually difficult to imitate and socially complex,heterogeneous knowledge bases and capabilities among firms are the majordeterminants of sustained competitive advantage and superior corporate performance.

This knowledge is embedded and carried through multiple entities includingorganizational culture and identity, policies, routines, documents, systems, and

employees. Originating from the strategic management literature, this perspective buildsupon and extends the resource-based view of the firm (RBV) initially promoted byPenrose (1959) and later expanded by others (Wernerfelt 1984, Barney 1991, Conner1991).

L

Labor theory of property

The labor theory of property or labor theory of appropriation or labor theory ofownership is a natural law theory that holds that property originally comes about by the

exertion of labor upon natural resources. It is also called the principle of firstappropriation or thehomestead principle.

Labor theory of value

The labor theories of value (LTV) are heterodox economic theories of value which

argue that the value of a commodity is related to the labor needed to produce or obtain

that commodity. The concept is most often associated with Marxian economics.
http://en.wikipedia.org/wiki/Karl_Marxhttp://en.wikipedia.org/wiki/Friedrich_Engelshttp://en.wikipedia.org/wiki/Critique_of_the_Gotha_Programmehttp://en.wikipedia.org/wiki/Critique_of_the_Gotha_Programmehttp://en.wikipedia.org/wiki/Thomas_Malthushttp://en.wikipedia.org/wiki/An_Essay_on_the_Principle_of_Populationhttp://en.wikipedia.org/wiki/An_Essay_on_the_Principle_of_Populationhttp://en.wikipedia.org/wiki/Goethehttp://en.wikipedia.org/w/index.php?title=Das_G%C3%B6ttliche&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Das_G%C3%B6ttliche&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Das_G%C3%B6ttliche&action=edit&redlink=1http://en.wikipedia.org/wiki/Knowledgehttp://en.wikipedia.org/wiki/Factors_of_productionhttp://en.wiktionary.org/wiki/firmhttp://en.wikipedia.org/wiki/Competitive_advantagehttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Resource-Based_Viewhttp://en.wikipedia.org/wiki/Edith_Penrosehttp://en.wikipedia.org/wiki/Birger_Wernerfelthttp://en.wikipedia.org/wiki/Natural_lawhttp://en.wikipedia.org/wiki/Homestead_principlehttp://en.wikipedia.org/wiki/Homestead_principlehttp://en.wikipedia.org/wiki/Homestead_principlehttp://en.wikipedia.org/wiki/Theory_of_value_%28economics%29http://en.wikipedia.org/wiki/Value_%28economics%29http://en.wikipedia.org/wiki/Commodityhttp://en.wikipedia.org/wiki/Labour_economicshttp://en.wikipedia.org/wiki/Marxian_economicshttp://en.wikipedia.org/wiki/Marxian_economicshttp://en.wikipedia.org/wiki/Labour_economicshttp://en.wikipedia.org/wiki/Commodityhttp://en.wikipedia.org/wiki/Value_%28economics%29http://en.wikipedia.org/wiki/Theory_of_value_%28economics%29http://en.wikipedia.org/wiki/Homestead_principlehttp://en.wikipedia.org/wiki/Natural_lawhttp://en.wikipedia.org/wiki/Birger_Wernerfelthttp://en.wikipedia.org/wiki/Edith_Penrosehttp://en.wikipedia.org/wiki/Resource-Based_Viewhttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Competitive_advantagehttp://en.wiktionary.org/wiki/firmhttp://en.wikipedia.org/wiki/Factors_of_productionhttp://en.wikipedia.org/wiki/Knowledgehttp://en.wikipedia.org/w/index.php?title=Das_G%C3%B6ttliche&action=edit&redlink=1http://en.wikipedia.org/wiki/Goethehttp://en.wikipedia.org/wiki/An_Essay_on_the_Principle_of_Populationhttp://en.wikipedia.org/wiki/Thomas_Malthushttp://en.wikipedia.org/wiki/Critique_of_the_Gotha_Programmehttp://en.wikipedia.org/wiki/Friedrich_Engelshttp://en.wikipedia.org/wiki/Karl_Marx


16/37

Legal origins theory

In economics, the legal origins theory states that many aspects of a country'seconomic state of development are the result of their legal system, most of all where aparticular country received its law from. The first papers on the theory were published

from 1997 onwards by a group of researchers around Andrei Shleifer.

Learning-by-doing

Learning-by-doing is a concept within economic theory. It refers to the capability of

workers to improve their productivity by regularly repeating the same type of action. The

increased productivity is achieved through practice, self-perfection and

minor innovations.

The concept of learning-by-doing has been used by Kenneth Arrow in his design

of endogenous growth theory to explain effects of innovation and technical

change. Robert Lucas, Jr.(1988) adopted the concept to explain increasing returns toembodied human capital. Yang and Borland (1991) have shown learning-by-doing plays

a role in the evolution of countries to greater specialization in production. In both these

cases, learning-by-doing and increasing returns provide an engine for long run growth.

Recently, it has become a popular explaining concept in the evolutionary

economics and Resource-Based View (RBV) of the firm.

Toyota Production System is known for Kaizen that is explicitly built upon learning-by-

doing effects.

Legal origins theory

In economics, the legal origins theory states that many aspects of a country'seconomic state of development are the result of their legal system, most of all where aparticular country received its law from. The first papers on the theory were publishedfrom 1997 onwards by a group of researchers around Andrei Shleifer.

Life Cycle Hypothesis

The Life Cycle Hypothesis (LCH) is an economic concept analyzing individualconsumption patterns. The life-cycle hypothesis considers that individuals plan theirconsumption and savings behavior over the long term and intend to even out theirconsumption in the best possible manner over their entire lifetimes. The key assumptionis that all individuals choose to maintain stable lifestyles. This implies that they usually
http://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Legal_systemhttp://en.wikipedia.org/wiki/Andrei_Shleiferhttp://en.wikipedia.org/wiki/Concepthttp://en.wikipedia.org/wiki/Economic_theoryhttp://en.wikipedia.org/wiki/Productivityhttp://en.wikipedia.org/wiki/Innovationhttp://en.wikipedia.org/wiki/Kenneth_Arrowhttp://en.wikipedia.org/wiki/Endogenous_growth_theoryhttp://en.wikipedia.org/wiki/Robert_Lucas,_Jr.http://en.wikipedia.org/wiki/Evolutionary_economicshttp://en.wikipedia.org/wiki/Evolutionary_economicshttp://en.wikipedia.org/wiki/Resource-Based_Viewhttp://en.wiktionary.org/wiki/firmhttp://en.wikipedia.org/wiki/Toyota_Production_Systemhttp://en.wikipedia.org/wiki/Kaizenhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Legal_systemhttp://en.wikipedia.org/wiki/Andrei_Shleiferhttp://en.wikipedia.org/wiki/Andrei_Shleiferhttp://en.wikipedia.org/wiki/Legal_systemhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Kaizenhttp://en.wikipedia.org/wiki/Toyota_Production_Systemhttp://en.wiktionary.org/wiki/firmhttp://en.wikipedia.org/wiki/Resource-Based_Viewhttp://en.wikipedia.org/wiki/Evolutionary_economicshttp://en.wikipedia.org/wiki/Evolutionary_economicshttp://en.wikipedia.org/wiki/Robert_Lucas,_Jr.http://en.wikipedia.org/wiki/Endogenous_growth_theoryhttp://en.wikipedia.org/wiki/Kenneth_Arrowhttp://en.wikipedia.org/wiki/Innovationhttp://en.wikipedia.org/wiki/Productivityhttp://en.wikipedia.org/wiki/Economic_theoryhttp://en.wikipedia.org/wiki/Concepthttp://en.wikipedia.org/wiki/Andrei_Shleiferhttp://en.wikipedia.org/wiki/Legal_systemhttp://en.wikipedia.org/wiki/Economics


17/37

don't save up a lot in one period to spend furiously in the next period, but keep theirconsumption levels approximately the same in every period.

Linkage principle

The linkage principle is a finding of auction theory. It states that auction houses havean incentive to pre-commit to revealing all available information about each lot, positive

or negative. The linkage principle is seen in the art market with the age-old tradition of

auctioneers hiring art experts to examine each lot and pre-commit to provide a truthful

estimate of its value.

The discovery of the linkage principle was most useful in determining optimal strategy

for countries in the process of auctioning off drilling rights (as well as other natural

resources, such as logging rights in Canada). An independent assessment of the land in

question is now a standard feature of most auctions, even if the seller country may

believe that the assessment is likely to lower the value of the land rather than confirm orraise a pre-existing valuation.

Failure to reveal information leads to the winning bidder incurring the discovery costs

himself and lowering his maximum bid due to the expenses incurred in acquiring

information. If he is not able to get an indepent assessment, then his bids will take into

account the possibility of downside risk. Both scenarios can be shown to lower the

expected revenue of the seller. The expected sale price is raised by lowering these

discovery costs of the winning bidder, and instead providing information to all bidders

for free.

Lipstick effect

The lipstick effect is the theory that when facing an economic crisis consumers will be

more willing to buy less costly luxury goods .Instead of buying expensive fur coats, for

example, people will buy expensive lipstick

It has been rumored that lipstick sales doubled after the 9/11 attacks on the

USA, however, other sources say this is an overstatement. In a New York Times in

article published May 1, 2008, Leonard Lauder is quoted as saying that he noted his

company's sales of lipstick rose after the terrorist attacks. He did not claim they

doubled.The underlying assumption is that consumers will buy luxury goods even if there is a

crisis. When consumer trust in the economy is dwindling, consumers will buy goods that

have less impact on their available funds. Outside the cosmetics market, consumers

could be tempted by expensive beer or smaller, less costly gadgets.
http://en.wikipedia.org/wiki/Auction_theoryhttp://en.wikipedia.org/wiki/Auction_househttp://en.wikipedia.org/w/index.php?title=Art_market&action=edit&redlink=1http://en.wikipedia.org/wiki/Financial_crisishttp://en.wikipedia.org/wiki/Financial_crisishttp://en.wikipedia.org/w/index.php?title=Art_market&action=edit&redlink=1http://en.wikipedia.org/wiki/Auction_househttp://en.wikipedia.org/wiki/Auction_theory


18/37

Juliet Shor in her book, The over Spent American, talks to consumer's purchase of

higher-priced, more prestigious lipsticks, specifically Chanel, that are used in public, vs.

lower-priced, less prestigious brands that are used in privacy of the bathroom.

Liquidity premium

Liquidity premium is a term used to explain a difference between two types of financial

securities (e.g. stocks), that have all the same qualities except liquidity. For example:

Liquidity premium is a segment of a three-part theory that works to explain the

behavior of yield curves for interest rates. The upwards-curving component of the

interest yield can be explained by the liquidity premium. The reason behind this is that

short term securities are less risky compared to long term rates due to the difference in

maturity dates. Therefore investors expect a premium, or risk premium for investing in

the risky security. Liquidity risk premiums are recommended to be used with longer term

investments, where those particular investments are illiquid. Or Assets that are traded

on an organized market are more liquid. Financial disclosure requirements are more

stringent for quoted companies. For a given economic result, organized liquidity and

transparency make the value of quoted share higher than the market value of an

unquoted share. The difference in the prices of two assets, which are similar in all

aspects except liquidity, is called the liquidity premium.

Living systems theory

Living systems theory is an offshoot of von Bertalanffy's general systems theory,created by James Grier Miller, which was intended to formalize the concept of "life".According to Miller's original conception as spelled out in his magnum opus LivingSystems, a "living system" must contain each of 20 "critical subsystems", which aredefined by their functions and visible in numerous systems, from simple cells toorganisms, countries, and societies. In Living SystemsMiller provides a detailed look ata number of systems in order of increasing size, and identifies his subsystems in each.

James Grier Miller (1978) wrote a 1,102 pages volume to present his living systemstheory. He constructed a general theory of living systems by focusing on concrete

systemsnonrandom accumulations of matter-energy in physical space-time organizedinto interacting, interrelated subsystems or components. Slightly revising the originalmodel a dozen years later, he distinguished eight "nested" hierarchical levels in suchcomplex structures. Each level is "nested" in the sense that each higher level containsthe next lower level in a nested fashion.
http://en.wikipedia.org/wiki/Financial_securityhttp://en.wikipedia.org/wiki/Financial_securityhttp://en.wikipedia.org/wiki/Theoryhttp://en.wikipedia.org/wiki/Yield_curvehttp://en.wikipedia.org/wiki/Interest_rateshttp://en.wikipedia.org/wiki/Long_termhttp://en.wikipedia.org/wiki/Organized_markethttp://en.wikipedia.org/w/index.php?title=Quoted_companies&action=edit&redlink=1http://en.wikipedia.org/wiki/Living_systems_theoryhttp://en.wikipedia.org/wiki/Ludwig_von_Bertalanffyhttp://en.wikipedia.org/wiki/James_Grier_Millerhttp://en.wikipedia.org/wiki/James_Grier_Millerhttp://en.wikipedia.org/wiki/Ludwig_von_Bertalanffyhttp://en.wikipedia.org/wiki/Living_systems_theoryhttp://en.wikipedia.org/w/index.php?title=Quoted_companies&action=edit&redlink=1http://en.wikipedia.org/wiki/Organized_markethttp://en.wikipedia.org/wiki/Long_termhttp://en.wikipedia.org/wiki/Interest_rateshttp://en.wikipedia.org/wiki/Yield_curvehttp://en.wikipedia.org/wiki/Theoryhttp://en.wikipedia.org/wiki/Financial_securityhttp://en.wikipedia.org/wiki/Financial_security


19/37

Lump-sum tax

A lump-sum tax is a tax that is a fixed amount, no matter the change in circumstanceof the taxed entity. (A lump-sum subsidyor lump-sum redistribution is definedsimilarly.)

It is one of the various modes used for taxation: income, things owned (property taxes),money spent (sales taxes), miscellaneous (excise taxes).

It is a regressive tax, such that the lower the income is, the higher the percentage ofincome applicable to the tax. An example is a poll tax to vote, which is unchanged nomatter what the income of the voter.

Other related examples include personal property taxes on cars or business equipmentregardless of income or ability to pay. Real estate taxes that are levied on a per lot orper unit basis are another example; some condominium fees could be regarded as

having most of the characteristics of a lump sum tax (other than being avoidable by notowning property in a condominium).

In economic theory, a lump-sum tax may have the advantage of not contributing to anexcess burden of taxation, a loss in economic efficiency that results from taxes reducingincentives for production. In practice, lump-sum taxes are often encountered, in spite oftheir conflict with other criteria, such as equity or ability to pay. A lump-sum tax remainsa standard for measuring the performance of other imperfect kinds of taxes (J. de V.Graaf, 1987).

M

Malthusianism

Malthusianism refers primarily to ideas derived from the political/economic thought ofReverend Thomas Robert Malthus, as laid out initially in his 1798 writings,An Essay onthe Principle of Population, which describes how unchecked population growth isexponential (1248) while the growth of the food supply was expected to bearithmetical (1234). Malthus believed there were two types of "checks" that couldthen reduce the population, returning it to a more sustainable level.

Malthusian Theory of Population

Thomas Robert Malthus was the first economist to propose a systematic theory ofpopulation. He articulated his views regarding population in his famous book, Essay onthe Principle of Population(1798), for which he collected empirical data to support histhesis. Malthus had the second edition of his book published in 1803, in which he
http://en.wikipedia.org/wiki/Taxhttp://en.wikipedia.org/wiki/Subsidyhttp://en.wikipedia.org/wiki/Subsidyhttp://en.wikipedia.org/wiki/Regressive_taxhttp://en.wikipedia.org/wiki/Poll_taxhttp://en.wikipedia.org/wiki/Excess_burden_of_taxationhttp://en.wikipedia.org/wiki/Economic_efficiencyhttp://en.wikipedia.org/wiki/Equity_%28economics%29http://en.wikipedia.org/wiki/Thomas_Malthushttp://en.wikipedia.org/wiki/An_Essay_on_the_Principle_of_Populationhttp://en.wikipedia.org/wiki/An_Essay_on_the_Principle_of_Populationhttp://en.wikipedia.org/wiki/An_Essay_on_the_Principle_of_Populationhttp://en.wikipedia.org/wiki/An_Essay_on_the_Principle_of_Populationhttp://en.wikipedia.org/wiki/Malthusian_growth_modelhttp://en.wikipedia.org/wiki/Malthusian_growth_modelhttp://en.wikipedia.org/wiki/Arithmetic_progressionhttp://en.wikipedia.org/wiki/Sustainabilityhttp://en.wikipedia.org/wiki/Sustainabilityhttp://en.wikipedia.org/wiki/Arithmetic_progressionhttp://en.wikipedia.org/wiki/Malthusian_growth_modelhttp://en.wikipedia.org/wiki/Malthusian_growth_modelhttp://en.wikipedia.org/wiki/An_Essay_on_the_Principle_of_Populationhttp://en.wikipedia.org/wiki/An_Essay_on_the_Principle_of_Populationhttp://en.wikipedia.org/wiki/Thomas_Malthushttp://en.wikipedia.org/wiki/Equity_%28economics%29http://en.wikipedia.org/wiki/Economic_efficiencyhttp://en.wikipedia.org/wiki/Excess_burden_of_taxationhttp://en.wikipedia.org/wiki/Poll_taxhttp://en.wikipedia.org/wiki/Regressive_taxhttp://en.wikipedia.org/wiki/Subsidyhttp://en.wikipedia.org/wiki/Tax


20/37

modified some of his views from the first edition, but essentially his original thesis didnot change.

Malthusian trap

The Malthusian trap, named after political economist Thomas Robert Malthus,suggests that for most of human history, income was largely stagnant becausetechnological advances and discoveries only resulted in more people, rather thanimprovements in the standard of living. It is only with the onset of the IndustrialRevolution in about 1800 that the income per person dramatically increased in somecountries, and they broke out of the Trap; it has been shown, however, that the escapefrom the Malthusian trap can also generate serious political upheavals.

Malthusian Theory of Development

T. R. Malthus pioneered the theory of population and linked it with development.According to Malthus, population growth is the end product of the whole process ofeconomic development. However, the increase in population cannot take place withoutproportionate increase in wealth. He was of the opinion that mere increase in populationcannot provide a stimulus to economic expansion. In his view, population growthpromotes development only when it brings an increase in eff'edive demand. Malthuscontended that the process of growth is not automatic and easy. It needs a consciousdeliberate effort on the part of the people to promote growth. He did not see anymovement of the economy towards a stationary state, but, he emphasized that theeconomy may reach slumps many times before it achieved an optimum level ofdevelopment. Therefore, the process of development consists of many ups and downs,and the journey is not a smooth one.

Market socialism

Market socialism refers to various economic systems where the means of productionare either publicly owned or cooperatively owned and operated for a profit in a marketeconomy. The profit generated by the firms system would be used to directlyremunerate employees or would be the source of public finance. Theoretically, thefundamental difference between market socialism and a traditional socialist economy isthe existence of a market for the means of production and capital goods.

Marxism

Marxism is an economic and social system based upon the political and economictheories of Karl Marx and Friedrich Engels. While it would take veritably volumes toexplain the full implications and ramifications of the Marxist social and economic
http://en.wikipedia.org/wiki/Thomas_Robert_Malthushttp://en.wikipedia.org/wiki/Industrial_Revolutionhttp://en.wikipedia.org/wiki/Industrial_Revolutionhttp://en.wikipedia.org/wiki/Means_of_productionhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Public_financehttp://en.wikipedia.org/wiki/Planned_economyhttp://en.wikipedia.org/wiki/Planned_economyhttp://en.wikipedia.org/wiki/Public_financehttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Means_of_productionhttp://en.wikipedia.org/wiki/Industrial_Revolutionhttp://en.wikipedia.org/wiki/Industrial_Revolutionhttp://en.wikipedia.org/wiki/Thomas_Robert_Malthus


21/37

ideology, Marxism is summed up in the Encarta Reference Library as a theory in whichclass struggle is a central element in the analysis of social change in Westernsocieties.Marxism is the antithesis of capitalism which is defined by Encarta as aneconomic system based on the private ownership of the means of production anddistribution of goods, characterized by a free competitive market and motivation by

profit.Marxism is the system of socialism of which the dominant feature is publicownership of the means of production, distribution, and exchange.

Marginal productivity theory

In economics, the theory that firms will pay a productive agent only what he or she addsto the financial earnings of the firm. Developed by writers such as John Bates Clark andPhilip Henry Wick steed at the end of the 19th century, marginal productivity theoryholds that it is unprofitable to buy, for example, a man-hour of labor if it costs more thanit contributes to its buyer's income. The amount in excess of costs that a productiveinput yields is the value of its marginal product; the theory posits that every type of input

should be paid the value of its marginal product.

Marginalist theory

Marginalism explains choice with the hypothesis that people decide whether to effectany given change based on the marginal utility of that change, with rival alternativesbeing chosen based upon which has the greatest marginal utility.

Mindful economics

Mindful economics is an approach to economic theory and practice that is dedicatedto institutional reform based on the core values of environmental sustainability, social

justice, and stability. The approach was founded by economist, Joel Magnuson, who is

most known for his book, Mindful Economics: How the U.S. Economy Works, Why It

Matters, and How It Could Be Different, NY: Seven Stories Press, 2008.

The central premise of mindful economics is that the dominant institutions in America

have created destructive social and environmental conditions, and changing these

conditions requires a deep exploration and development of alternative institutions.

Mindful economics is based on empirical evidence of the destructive conditions that can

be found in a number of areas such as widespread environmental destruction, resource

depletion, and global warming; the vast inequality of wealth and income distribution; and

the banking crisis of 2008.

It is also based on empirical evidence of how people have confronted and can confront

these problems directly by fostering change through the development of non-

capitalist institutions. Examples of such institutions would be locally based community
http://encyclopedia2.thefreedictionary.com/costhttp://en.wikipedia.org/wiki/Marginalismhttp://en.wikipedia.org/wiki/Economichttp://en.wikipedia.org/w/index.php?title=Joel_Magnuson&action=edit&redlink=1http://en.wikipedia.org/wiki/Seven_Stories_Presshttp://en.wikipedia.org/wiki/Environmental_destructionhttp://en.wikipedia.org/wiki/Resource_depletionhttp://en.wikipedia.org/wiki/Resource_depletionhttp://en.wikipedia.org/wiki/Global_warminghttp://en.wikipedia.org/wiki/Banking_crisis_of_2008http://en.wikipedia.org/wiki/Capitalisthttp://en.wikipedia.org/wiki/Capitalisthttp://en.wikipedia.org/wiki/Banking_crisis_of_2008http://en.wikipedia.org/wiki/Global_warminghttp://en.wikipedia.org/wiki/Resource_depletionhttp://en.wikipedia.org/wiki/Resource_depletionhttp://en.wikipedia.org/wiki/Environmental_destructionhttp://en.wikipedia.org/wiki/Seven_Stories_Presshttp://en.wikipedia.org/w/index.php?title=Joel_Magnuson&action=edit&redlink=1http://en.wikipedia.org/wiki/Economichttp://en.wikipedia.org/wiki/Marginalismhttp://encyclopedia2.thefreedictionary.com/cost


22/37

cooperatives, small businesses, and public institutions that are all structured around the

same core values.

Monetary theory

British classical economists in the 19th century had a well-developed controversybetween the Banking and the Currency school. This parallels recent debates betweenproponents of the theory of endogenous money, such as Nicholas Kaldor, andmonetarists, such as Milton Friedman. Monetarists and members of the currency schoolargued that banks can and should control the supply of money. According to theirtheories, inflation is caused by banks issuing an excessive supply of money. Accordingto proponents of the theory of endogenous money, the supply of money automaticallyadjusts to the demand, and banks can only control the terms (e.g., the rate of interest)on which loans are made.

Monetarism

Monetarism is an economic theory which focuses on the macroeconomic effects of thesupply of money and central banking. Formulated by Milton Friedman, it argues thatexcessive expansion of the money supply is inherently inflationary, and that monetaryauthorities should focus solely on maintaining price stability.

Monopolistic advantage theory

The monopolistic advantage theory is an approach in international business whichexplains why firms can compete in foreign settings against indigenous competitors.

Moral hazard

In economic theory,moral hazard is a tendency to take undue risks because the costsare not borne by the party taking the risk. The term defines a situation where thebehavior of one party may change to the detriment of another after a transaction hastaken place. For example, a person with insurance against automobile theft may be lesscautious about locking their car, because the negative consequences of vehicle theftare now (partially) the responsibility of the insurance company. A party makes adecision about how much risk to take, while another party bears the costs if things gobadly, and the party insulated from risk behaves differently from how it would if it were

fully exposed to the risk.

N
http://en.wikipedia.org/wiki/British_Banking_Schoolhttp://en.wikipedia.org/wiki/Currency_schoolhttp://en.wikipedia.org/wiki/Nicholas_Kaldorhttp://en.wikipedia.org/wiki/Milton_Friedmanhttp://en.wikipedia.org/wiki/Endogenous_moneyhttp://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/Milton_Friedmanhttp://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/Economic_theoryhttp://en.wikipedia.org/wiki/Behaviorhttp://en.wikipedia.org/wiki/Financial_transactionhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Riskhttp://en.wikipedia.org/wiki/Riskhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Financial_transactionhttp://en.wikipedia.org/wiki/Behaviorhttp://en.wikipedia.org/wiki/Economic_theoryhttp://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/Milton_Friedmanhttp://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/Endogenous_moneyhttp://en.wikipedia.org/wiki/Milton_Friedmanhttp://en.wikipedia.org/wiki/Nicholas_Kaldorhttp://en.wikipedia.org/wiki/Currency_schoolhttp://en.wikipedia.org/wiki/British_Banking_School


23/37

Neofeudalism

Neofeudalism (literally new feudalism the terms are used interchangeably in theliterature) refers to a theorized contemporary rebirth of policies of governance, economyand public lifereminiscent of those present in many feudal societies. It is related to

some of the ideas of neo-medievalism.

Neofunctionalism

Neofunctionalism is a theory of regional integration, building on the work of Ernst B.Haas, an American political scientist and also Leon Lindberg, an American politicalscientist. Jean Monnet's approach to European integration, which aimed at integratingindividual sectors in hopes of achieving spill-over effects to further the process ofintegration, is said to have followed the neofunctional school's tack. Haas later declaredthe theory of neofunctionalism obsolete, after the process of European integration

started stalling in the 1960s, when Charles de Gaulle's "empty chair" politics paralyzedthe institutions of the European Coal and Steel Community, European EconomicCommunity, and European Atomic Energy Community. The theory was updated andfurther specified namely by Wayne Sandholtz, Alec Stone Sweet, and their collaboratorsin the 1990s and in 2000s (references below). The main contributions of these authorswere an employment of empiricism.

Neofunctionalism describes and explains the process of regional integration withreference to how three causal factors interact with one another: (a) growing economicinterdependence between nations, (b) organizational capacity to resolve disputes andbuild international legal regimes, and (c) supranational market rules that replace

national regulatory regimes.

Noisy market hypothesis

In finance, the noisy market hypothesis contrasts the efficient-market hypothesis inthat it claims that the prices of securities are not always the best estimate of the trueunderlying value of the firm. It argues that prices can be influenced by speculators andmomentum traders, as well as by insiders and institutions that often buy and sell stocksfor reasons unrelated to fundamental value, such as for diversification, liquidity andtaxes. These temporary shocks referred to as "noise" can obscure the true value ofsecurities and may result in mispricing of these securities for many years.

New Growth Theory

An economic growth theory that posits humans' desires and unlimited wants foster ever-increasing productivity and economic growth. The new growth theory argues that real
http://en.wikipedia.org/wiki/Governancehttp://en.wikipedia.org/wiki/Economyhttp://en.wikipedia.org/wiki/Feudalismhttp://en.wikipedia.org/wiki/Neo-medievalismhttp://en.wikipedia.org/wiki/Regional_integrationhttp://en.wikipedia.org/wiki/Ernst_B._Haashttp://en.wikipedia.org/wiki/Ernst_B._Haashttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Political_sciencehttp://en.wikipedia.org/w/index.php?title=Leon_Lindberg&action=edit&redlink=1http://en.wikipedia.org/wiki/Jean_Monnethttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/European_integrationhttp://en.wikipedia.org/wiki/Charles_de_Gaullehttp://en.wikipedia.org/wiki/European_Coal_and_Steel_Communityhttp://en.wikipedia.org/wiki/European_Communityhttp://en.wikipedia.org/wiki/European_Communityhttp://en.wikipedia.org/wiki/European_Atomic_Energy_Communityhttp://en.wikipedia.org/wiki/Alec_Stone_Sweethttp://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Efficient-market_hypothesishttp://en.wikipedia.org/wiki/Momentum_traderhttp://en.wikipedia.org/wiki/Momentum_traderhttp://en.wikipedia.org/wiki/Efficient-market_hypothesishttp://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Alec_Stone_Sweethttp://en.wikipedia.org/wiki/European_Atomic_Energy_Communityhttp://en.wikipedia.org/wiki/European_Communityhttp://en.wikipedia.org/wiki/European_Communityhttp://en.wikipedia.org/wiki/European_Coal_and_Steel_Communityhttp://en.wikipedia.org/wiki/Charles_de_Gaullehttp://en.wikipedia.org/wiki/European_integrationhttp://en.wikipedia.org/wiki/Europehttp://en.wikipedia.org/wiki/Jean_Monnethttp://en.wikipedia.org/w/index.php?title=Leon_Lindberg&action=edit&redlink=1http://en.wikipedia.org/wiki/Political_sciencehttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Ernst_B._Haashttp://en.wikipedia.org/wiki/Ernst_B._Haashttp://en.wikipedia.org/wiki/Regional_integrationhttp://en.wikipedia.org/wiki/Neo-medievalismhttp://en.wikipedia.org/wiki/Feudalismhttp://en.wikipedia.org/wiki/Economyhttp://en.wikipedia.org/wiki/Governance


24/37

GDP per person will perpetually increase because of people's pursuit of profits. Ascompetition lowers the profit in one area, people have to constantly seek better ways todo things or invent new products in order to garner a higher profit. This main idea is oneof the central tenets of the theory.

New Trade Theory

New Trade Theory (NTT) is a collection of economic models in international tradewhich focuses on the role of increasing returns to scale and network effects, which weredeveloped in the late 1970s and early 1980s.

New Trade theorists relaxed the assumption of constant returns to scale, and someargue that using protectionist measures to build up a huge industrial base in certainindustries will then allow those sectors to dominate the world market.

O

Organizational theory

The systems framework is also fundamental to organizational theory as organizationsare complex dynamic goal-oriented processes. One of the early thinkers in the field wasAlexander Bogdanov, who developed his Tectology, a theory widely considered aprecursor of von Bertalanffy's GST, aiming to model and design human organizations(see Mattessich 1978, Capra 1996). Kurt Lewin was particularly influential in developingthe systems perspective within organizational theory and coined the term "systems ofideology", from his frustration with behavioral psychologies that became an obstacle to

sustainable work in psychology. Jay Forrester with his work in dynamics andmanagement alongside numerous theorists including Edgar Schein that followed in theirtradition since the Civil Rights Era have also been influential.

Olduvai theory

The Olduvai theory states that industrial civilization (as defined by per capitaenergyproduction) will have a lifetime of less than or equal to 100 years (1930-2030). Thetheory provides a quantitative basis of the transient-pulse theory of modern civilization.The name is a reference to the Olduvai Gorge in Tanzania.

P

Post-Marxist Theory

Poststructuralist Marxism, or post-Marxism, is a theoretical viewpoint that elaboratesand revises the work of Louis Althusser and Michel Foucault. Unlike traditional Marxism,which emphasizes the priority of class struggle and the common humanity of oppressed
http://en.wikipedia.org/wiki/Economichttp://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Returns_to_scalehttp://en.wikipedia.org/wiki/Network_effecthttp://en.wikipedia.org/wiki/Organizational_theoryhttp://en.wikipedia.org/wiki/Organizationhttp://en.wikipedia.org/wiki/Alexander_Bogdanovhttp://en.wikipedia.org/wiki/Tectologyhttp://en.wikipedia.org/wiki/Kurt_Lewinhttp://en.wikipedia.org/wiki/Jay_Forresterhttp://en.wikipedia.org/wiki/Edgar_Scheinhttp://en.wikipedia.org/wiki/African-American_Civil_Rights_Movement_%281955-1968%29http://en.wikipedia.org/wiki/Industrializationhttp://en.wikipedia.org/wiki/Energyhttp://en.wikipedia.org/wiki/Olduvai_Gorgehttp://en.wikipedia.org/wiki/Olduvai_Gorgehttp://en.wikipedia.org/wiki/Energyhttp://en.wikipedia.org/wiki/Industrializationhttp://en.wikipedia.org/wiki/African-American_Civil_Rights_Movement_%281955-1968%29http://en.wikipedia.org/wiki/Edgar_Scheinhttp://en.wikipedia.org/wiki/Jay_Forresterhttp://en.wikipedia.org/wiki/Kurt_Lewinhttp://en.wikipedia.org/wiki/Tectologyhttp://en.wikipedia.org/wiki/Alexander_Bogdanovhttp://en.wikipedia.org/wiki/Organizationhttp://en.wikipedia.org/wiki/Organizational_theoryhttp://en.wikipedia.org/wiki/Network_effecthttp://en.wikipedia.org/wiki/Returns_to_scalehttp://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Economic


25/37

groups, post-Marxism reveals the sexual, racial, class, and ethnic divisions of modernWestern society. This book surveys the different versions of post-Marxist theory: theeconomic theory of Stephen Resnick and Richard Wolff, the historical methodology ofMichel Foucault, the political theory of Ernesto Laclau and Chantal Mouffe, the feminismof Judith Butler, the materialist philosophy of Pierre Macherey, and the cultural studies

of Tony Bennett and John Frow. Providing a coherent framework for these otherwisequite divergent theorists, Philip Goldstein outlines the history of Marxist philosophical ortheoretical views and explains how they all count as post-Marxist.

Policy Ineffectiveness Proposition (PIP)

The Policy Ineffectiveness Proposition (PIP) is a new classical theory proposed in

1976 by Thomas J. Sargent and Neil Wallace based upon the theory of rational

expectations. It posited that monetary policy could not systematically manage the levels

of output and employment in the economy.

Power theory of economics

Developed by Yasuma Takada in a series of lectures at Kyoto University, the power

theory of economics is mostly based on a critique of both mainstream economics as

well asheterodox economics theories of unemployment, most notably Keynsian

economics and Marxian economics. The theory accommodates Thorstein

Veblen, Vilfredo Pareto and Joseph Schumpeter.

Takada sometimes referred to the theory as a second order approximation, as

introducing a theory of power relations into the materialism of economics was seen as

one step closer to a true picture of socio-economic relationships.

Power theory of value

Nitzan and Bichler argue that it was never possible to separate economics from politics.This separation is required to allow for neoclassical economics to base their theory onutility value and for Marxists to base the labour theory of value on quantified abstractlabour. Instead of a utility theory of value (like neoclassical economics) or a labourtheory of value (as found in Marxist economics), Nitzan and Bichler propose a powertheory of value. The struc

theory. sha

Documents