EC12. Pointers No. 7

FAQs on Chs. 8-9 of Backhouse – History and Theory in Europe, American Economics to 1939

  1. How does Schumpeter’s view of the business cycle differ from that of Marx? Extra credit (the answer is not in Backhouse): Can either view be used to predict or forecast the business cycle?
  1. Explain Schumpeter’s idea of “creative destruction.” [Hint: Try a source other than Backhouse.]
  1. Explain Walras’ idea of tatonnement.
  1. Carl Menger proposed two doctrines that eventually became the foundations of Austrian economics. What are these doctrines?
  1. What is the foundation of Marshall’s economics? Discuss the time periods he applied to market transactions.
  1. State the theory of income distribution proposed by John Bates Clark?
  1. How did Clark view the effect of technological innovation on an economy?
  1. What term did Veblen use for “habits of thought”?
  1. Who coined the term “neoclassical”? What does it mean?
  1. Who contributed the theory of monopolistic competition? What does this theory say?
  1. Schumpeter disagreed with Karl Marx on how capitalism would break down. How did these two economists differ? [Note: Refer to the chapter on classical political economy for Marx’s views on capitalism.]
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