Tuesday, February 15, 2011
Chapter 7, Pages 73-77
Alfred Marshall's Principles of Economics became a widely used and highly influential work. Backing away from the mathematics, Marshall approached the subject primarily with the use of literature and diagrams. Marshall introduced the vocabulary of supply and demand, and illustrated their application with the diagram still used today. Though some at the time had ventured to explain everthing on which a price may depend, Principles used the idea of a partial equilibrium which focused on interactions within specific markets. Viewing a given market in this way was made possible by assuming that all other factors remain constant- the idea of ceteris paribus.
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B for Jim, due to spelling errors.
ReplyDeleteThis chapter is about Marshall, and the end of the 19th century. It really isn't until this time that it became apparent to everyone that economies were growing. Some of them had been growing for as much as two centuries at this point ... but it was slow and fitful.
In America, it isn't long after the Civil War - after the end of the panic of 1873 - that it becomes apparent to people that the economy was improving fairly consistently. We now know that there were business cycles and growth for decades before that, but it wasn't noticed much by contemporary authors.