Jan.8th.2019 Micro Jan.10th.2019 History of Economics -Define “Science” -we can never define something is not true -certainty prove (truth) Economics: the science revolutions (4 times) The 1st revolution The Enlightenment -1715-1789 -Build society upon reason& natural law, not catholic church doctrine -All men are born equal (rejection of old conservatism) -Science: comes from Christianity-Roger Bacon, Francis Bacon, Descartes, Isaac Newton -The reformation(1517): Protestantism encourages literacy & individualism -Enlightened self-interest =Needs basis in reason =Result: those who further others, further themselves =Not the same as ‘greed is good’ Adam Smith (Grandfather of Economics) -An inquiry into the nature and causes of the wealth of nations(1776) -Seminal work- first in economic theory -Smith often misquoted The 2nd revolution The marginal -Economics: Part of philosophy until late 19th century -William Stanley Jevons(supply &demand comes from him): A general mathematical theory of political economy (1862) -Alfred Marshall: Principles of Economics in 1881 and he spent much of the next decade at work on the treatise -Marginalism =the water-diamond paradox(Adam smith) =Smith’s solution:use vs. exchange value =Marginalist solution: water has lower marginal utility than diamonds The 3rd The Mathematical -Paul Samuelson (Father of economics) -Foundations of economic analysis(published by Pau Samuelson in1947) -Grounds economics in mathematical optimization(A way) - ...
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