welcome to the macat multimedia series and to my cat's introduction to economics economics shapes our world it is a study of the production of goods and the transfer of wealth of why prices rise and there is always a gap between rich and poor and it studies human behavior as a relationship between ends and scarce means which have alternative uses so it's no surprise that economists are highly influential of all the social sciences economics has the greatest impact on the way that governments think and work some of the most powerful policymakers in the world are economists by training and some of the most important writers in history have studied economic problems our understanding of what economics is has evolved over the centuries for Xenophon writing in the 4th century BC it meant the mastery of household management by the 17th century though the focus was on political economy economics in the context of law politics and the creation of public policy it was not until nearly 1800 that economics can be considered an independent discipline the modern era of economic thinking began with the 1776 publication of Adam Smith's famous an inquiry into the nature and causes of the wealth of nations Smith who had begun his career as a philosopher and who according to James Boswell rarely discussed his ideas for fear of harming the sales of his books took issue when the then-popular idea that the state should control the economy and protect industry vile laws and tax barriers and the new school of liberal free-market thought that he found it quickly became dominant Smith's free-market orthodoxy today generally known as classical economics was further developed by fellow economists such as David Ricardo in principles of political economy and Taxation and John Stuart Mill in principles of political economy advocating free trade and minimal government intervention in the workings of the economy it remained popular until the early 1930s when the global economic collapse prompted by the Wall Street Crash and the global depression that followed undermined the certainty that free economies are inherently self-correcting it was then that John Maynard Keynes and his general theory of employment interest and money emerged with an influential critique of the free market that highlighted the inherent instability of the market economy he and his disciples the Keynesian x' called for revival of government regulation and intervention in the economy Keynesianism became the unchallenged leader in economic thought from 1945 until 1970 when a fresh series of economic crises focused on the price of oil prompted another rethink the 70s witnessed a re-emergence of the belief in free markets and the emergence of the monetarist school led by the economist Milton Friedman and based on seminal papers such as his the role of monetary policy and books like a monetary history of the United States and the rise of monetarism coincided with the emergence of the new classical economic thought basing macroeconomic policy the study of the economy as a whole on a rigorously structured study of microeconomics the understanding of how individual markets goods and services really work the work of economists such as Robert Lucas Jr who considered some international evidence on output inflation trade-offs and wrote on the core problem of inequality in his paper why doesn't capital flow from rich to poor countries lies at the heart of this new classical school today economics remains divided and the financial crisis of 2007 and 8 brought the same old debates to the fore just as it did in the 1930s the Keynesian school has attracted those dismayed by damage wrought in lightly regulated economies while classical economists renewed their warnings against government intervention the workings of our economy affect us all often in ways that feel beyond our control McCants library of analyses help you to understand these debates will help you to grasp the importance of public policy and household management come inside to find out more macat learn better think smarter aim higher