The story
Two and a half centuries, six chapters.
Every school of economic thought began as an answer to the problems of its day. Read the five eras in order and see where each one was born.
Chapter i
1776 to 1870
Political economy
Industrial revolution, the first factories and free-trade fights. Economics is a branch of moral philosophy.
Why are some nations rich?
Pressing then
Chapter ii
1870 to 1936
The marginal revolution
Value is redefined around choices at the margin. Maths enters economics. Critics ask what the models leave out.
Value is decided at the margin.
Pressing then
- 1871Mainstream
Neoclassical economics
How do individuals and firms allocate scarce resources, and how do markets reach equilibrium?
Open the school - 1871Heterodox
Austrian school
How can a society coordinate when the knowledge it needs is scattered across millions of people?
Open the school - 1899Bridge
Institutional economics
How do rules, norms and organisations shape what economies achieve?
Open the school
- 1871Mainstream
Chapter iii
1936 to 1970
The age of Keynes
The Great Depression and the Second World War. Governments take responsibility for jobs. Germany builds a rules-based alternative.
Nearly a quarter of America out of work.
Pressing then
- 1930Mainstream
Ordoliberalism
What rules does a market economy need so that neither monopolies nor governments abuse power?
Open the school - 1936Mainstream
Keynesian economics
Why can an economy get stuck with mass unemployment, and what should government do about it?
Open the school - 1950Heterodox
Post-Keynesian economics
What if the future is genuinely unknowable, demand drives everything, and banks create money?
Open the school - 1956Mainstream
Monetarism
What causes inflation, and what should a central bank do?
Open the school
- 1930Mainstream
Chapter iv
1970 to 2008
Expectations and markets
Stagflation breaks the post-war consensus. Expectations, central banks and markets take centre stage. New critics multiply.
Inflation and unemployment rise together.
Pressing then
- 1971Heterodox
Ecological economics
How does an economy work when it sits inside a finite planet?
Open the school - 1972Mainstream
New classical and real business cycles
Can we build macroeconomics from individuals who optimise and form rational expectations?
Open the school - 1979Bridge
Behavioural economics
How do real people actually make decisions?
Open the school - 1980Mainstream
New Keynesian economics
Why are prices sticky, and how should a central bank set interest rates?
Open the school - 1982Bridge
Complexity and evolutionary economics
What if the economy is an evolving system that is never in equilibrium?
Open the school - 1990Heterodox
Modern Monetary Theory
What really limits a government that issues its own currency?
Open the school - 1992Heterodox
Feminist economics
What does economics miss when it ignores gender, care and unpaid work?
Open the school
- 1971Heterodox
Chapter v
2008 to now
After the crash
No single new school. Instead: banks put back into macro models, many-household models, a boom in empirical work, and louder calls for pluralism from students.
A banking crash the models left out.
Pressing then
No new school has formed in this chapter yet. The schools of earlier chapters are still arguing over what it means.
Chapter vi
Now and next
The arguments still open.