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These are models with two sectors, producers of final output and an R&D sector: the R&D sector develops ideas which grant them monopoly power. R&D firms are assumed to be able to make monopoly profits selling ideas to production firms, but the free entry condition means that these profits are dissipated on R&D spending. [citation needed]
A transition economy or transitional economy is an economy which is changing from a centrally planned economy to a market economy. [1] Transition economies undergo a set of structural transformations intended to develop market-based institutions.
In the philosophy of economics, economics is often divided into positive (or descriptive) and normative (or prescriptive) economics.Positive economics focuses on the description, quantification and explanation of economic phenomena, [1] while normative economics discusses prescriptions for what actions individuals or societies should or should not take.
The earlier term for the discipline was "political economy", but since the late 19th century, it has commonly been called "economics". [22] The term is ultimately derived from Ancient Greek οἰκονομία (oikonomia) which is a term for the "way (nomos) to run a household (oikos)", or in other words the know-how of an οἰκονομικός (oikonomikos), or "household or homestead manager".
[18] [19] [5]: 526 The terms "macrodynamics" and "macroanalysis" were introduced by Ragnar Frisch in 1933, and Lawrence Klein in 1946 used the word "macroeconomics" itself in a journal title in 1946. [ 18 ] but naturally several of the themes which are central to macroeconomic research had been discussed by thoughtful economists and other ...
Neoclassical economics is often criticized for having a normative bias despite sometimes claiming to be "value-free". [ 45 ] [ 46 ] Such critics argue an ideological side of neoclassical economics, generally to argue that students should be taught more than one economic theory and that economics departments should be more pluralistic .
The Harrod–Domar model is a Keynesian model of economic growth.It is used in development economics to explain an economy's growth rate in terms of the level of saving and of capital.
Microeconomics analyzes the market mechanisms that enable buyers and sellers to establish relative prices among goods and services. Shown is a marketplace in Delhi. ...