Economic Theories and Thinkers Flashcards

A set of vocabulary flashcards covering major economic schools of thought, key figures, and their central concepts as presented in the lecture notes.

Institutionalism

An economic perspective focusing on industrialization, the rise of corporations, and a criticism of pure market economics.

Thorstein Veblen

An economist associated with the concept of the leisure class and wasteful spending, suggesting people buy goods for status and social prestige.

Conspicuous Consumption

The practice of buying expensive goods specifically to display wealth and status.

John Kenneth Galbraith

An economist who highlighted the imbalance between public and private sectors and the influence of corporations on society and consumers.

Countervailing Power

The use of unions and government to balance corporate power.

Keynesian Theory

A theory focusing on active fiscal policy and government intervention to stabilize the economy, particularly during market failures like the Great Depression.

John Meynard Keynes

An economist who proposed that government spending solves unemployment and boosts demand during recessions.

Monetarism

An economic school of thought criticizing Keynesian policies and asserting that inflation is caused mainly by excessive money growth.

Milton Friedman

An economist who argued that money supply controls inflation and advocated for less government intervention.

Rational Expectations

The theory that people use all available information to predict policy effects, often leading to the failure of anticipated government policies.

John Muth

The thinker associated with Rational Expectations, who argued that anticipated government policy fails because people adjust their expectations.

Public Choice Theory

A theory related to the expansion of government and regulation, focusing on self-interest in politics and regulation.

George Stigler

A proponent of Public Choice Theory who examined how firms influence politics and regulation.

Regulatory Capture

A phenomenon where regulators often serve the interests of industries instead of the public.