Economic theory

What is an economic theory?

An economic theory is a set of principles or general statements who intend to interpret the economic reality. Its objective is to develop lines of thought with the intention of explaining an economic problem at a given historical moment.

In it, two approaches are distinguished: microeconomics, which studies a determined productive unit and the behavior of the individual consumer, and macroeconomics, which analyzes the economic variables of a region, a country or of world.

Characteristics of an economic theory

An economic theory is characterized by the following:

• Contributes explanations about the behavior of economic variables, such as inflation, interest rate, exchange rate, in relation to various economic agents such as family, company or State.
• Allows the analysis of economic situations that can manifest at the level global (macroeconomics) or to a higher level reduced (microeconomics).
• It presents various fields of study that accompany the current historical economic moment. This is how economic psychology or experimental economics, among others, have been developed.
• So tools measurement, statistics and econometrics, which allow a more in-depth understanding of economic variables, facilitating decision-making.

Examples of economic theories

Classical theory

This theory bases its positions on the empirical study of reality, formulating conceptual models through which natural laws are enunciated.

Its main exponents were Adam Smith, considered "the father of Economics", David Ricardo and Jean-Baptiste Say.

The areas of interest of this theory were the groups or classes of individuals, the study of the wages received by workers and the wealth of nations through the generation of value not paid to the worker, which was received by the employer or capitalist. (capital gain).

The different schools of this theory considered frequent types of problems, developing lines of thought to explain them.

Marxist theory

Created by the philosopher, sociologist and economist Karl Marx, this theory is based on the search for equality of social classes, where the proletariat must have the same benefits and rights as the rest of society.

In addition to eliminating social classes, the theory proposed that the proletariat rule a state under the socialist system, so that the necessary changes that lead to a more just and egalitarian society can be made.

Keynesian theory

Developed by John Maynard Keynes. This economist and his school argued that government intervention could stabilize the economy by increasing levels of employment and production, by increasing public spending in periods of unemployment.

Neoclassical theory

It emerged in the mid-nineteenth century as a reaction to the classical school. His main contribution was the marginal theory of the value of a good, which exposes the increase in the total utility of a good, when consuming an additional unit of it.

Its field of action is individual economic units (people, companies, etc.), that is, microeconomics.