NEOCLASSICAL ECONOMISTS Meaning and
Definition
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Neoclassical economists refer to a group of economists who follow the neoclassical school of economic thought. Neoclassical economics is an economic theory and approach that emerged in the late 19th and early 20th centuries as a response to the perceived shortcomings of classical economics and the rise of marginal utility theory.
Neoclassical economists emphasize the importance of rational decision-making by individuals within a free market system. They believe that individuals aim to maximize their own utility or satisfaction when making economic decisions, and that the interactions of countless individuals in the marketplace lead to efficient allocation of resources. They argue that prices play a crucial role in signaling the relative scarcity and value of goods and services, thereby ensuring optimal allocation of resources.
Neoclassical economics also assumes that markets are characterized by perfect competition, where all participants have full and equal access to information, there are no barriers to entry or exit, and there is a multitude of buyers and sellers. This assumption allows for the analysis of supply and demand dynamics to determine prices and quantities.
Furthermore, neoclassical economists typically support free trade, limited government intervention in the economy, and the belief that economic growth can be achieved through capital accumulation, technological progress, and efficient resource allocation.
Overall, neoclassical economists are known for their emphasis on rational individual decision-making, efficiency, and the belief that market forces should play a central role in determining economic outcomes.
Etymology of NEOCLASSICAL ECONOMISTS
The word "neoclassical economists" typically refers to a school of economic thought that emerged in the late 19th century and dominated mainstream economics in the 20th century. The term "neoclassical" itself comes from the combination of two words: "neo" meaning new, and "classical" referring to the classical economists of the 18th and early 19th centuries.
The classical economists, such as Adam Smith, David Ricardo, and John Stuart Mill, laid the foundations of modern economics, focusing on free markets, individual self-interest, and the invisible hand guiding economic forces. Neoclassical economists, while building upon these foundations, introduced new mathematical tools and techniques to formalize economic theory.
The name "neoclassical" emerged in the late 19th century to distinguish this new generation of economists from earlier classical economists.
