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Definition of

classical economics


economic theory stressing importance of free enterprise a theory focusing on the functioning of a market economy and providing a rudimentary explanation of consumer and producer behavior in particular markets. The theory postulates that, over time, the economy would tend to operate at full employment because increases in supply would create corresponding increases in demand.

Recommended Further Reading (Term count)
  • Allocating Corporate Capital Fairly
    by John L. Mariotti
    The appetite of organizations for capital is insatiable. Understanding the nature of capital and its effective allocation is essential to organizational success. Classical economics defines land, labor, and capital as the determinants of wealth, each being exclusive to its owner. Now there is a fourth determinant of wealth—information—and it is nonexclusive. The more information is shared, the more valuable it becomes. Business is a competition...
  • Jean-Baptiste Say
    Early classical political economist
    Jean-Baptiste Say was an economist and businessman, writer, social philosopher, and a successful entrepreneur, and businessman. He initially worked as clerk to a merchant in England before returning to France, where he was employed at a life assurance company. His first published work was a pamphlet on the liberty of the press, published in 1789. He taught at the Conservatoire des Arts and Métiers, and Collège de France and, after being removed...
  • Franco Modigliani
    Nobel Prize-winning macroeconomist
    Franco Modigliani was an Italian-American economist, and professor at the MIT Sloan School of Management. He emigrated to the United States a few days before the start of World War II. He was then awarded a fellowship by the Graduate Faculty of Political and Social Science of the New School for Social Research. While there, he studied under Jacob Marschak, who helped him develop solid foundations in economics and econometrics. He went on to...

Definitions of ’classical economics’ and meaning of ’classical economics’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’classical economics’ and other financial terms with our online QFINANCE Financial Dictionary.

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