The Most Popular Economic Theory: A Comprehensive Ranking

Choose the economic theory you think is the most popular!

Author: Gregor Krambs
Updated on Apr 13, 2024 07:03
Unlock the mysteries of the world's economic landscape by casting your vote in our exciting new ranking: 'What is the most popular economic theory?'! Delve into the fascinating realm of supply and demand, fiscal policies, and market structures as you explore various theories that have shaped the global economy for centuries. From the groundbreaking ideas of Adam Smith to the revolutionary tenets of Karl Marx, it's time to let your opinion be heard! Join thousands of other inquisitive minds in determining the most influential and popular economic theory of all time. Don't see your favorite on the list? Fear not, for you can suggest a missing option and rally the support it deserves. So, put your thinking caps on and make your way to economic enlightenment by participating in this thrilling StrawPoll ranking today!

What Is the Most Popular Economic Theory?

  1. 1
    41
    votes
    This theory assumes that individuals are rational and seek to maximize their utility. It is widely used in academic and policy circles.
    Neoclassical economics is a dominant economic theory that emerged in the late 19th century. It is based on the principles of classical economics but incorporates mathematical models, emphasizing individual rationality and market equilibrium.
    • Methodological Individualism: Emphasizes individual behavior as the key driving force in economic decision-making.
    • Market Equilibrium: Believes that markets tend towards a state of equilibrium, where supply meets demand and maximizes social welfare.
    • Marginalism: Views economic decisions as being based on marginal utility, i.e., the additional satisfaction gained from consuming one more unit of a good.
    • Perfect Competition: Assumes markets are perfectly competitive with numerous buyers and sellers, homogeneous goods, and free entry and exit.
    • Resource Allocation: Asserts that resources are efficiently allocated in competitive markets, leading to Pareto optimality.
  2. 2
    27
    votes

    Keynesian economics

    John Maynard Keynes
    This theory emphasizes the role of government in stabilizing the economy through fiscal and monetary policies. It gained popularity during the Great Depression.
    Keynesian economics is an economic theory that focuses on the role of government intervention in stabilizing the economy and promoting economic growth. It was developed by John Maynard Keynes, a British economist, during the 1930s in response to the Great Depression.
    • Government Intervention: Keynesian economics advocates for government intervention in the economy through fiscal and monetary policies.
    • Aggregate Demand: It emphasizes the importance of aggregate demand in determining overall economic activity.
    • Business Cycles: It seeks to explain and address fluctuations in economic output and employment, known as business cycles.
    • Full Employment: Keynesian economics aims to achieve and maintain full employment in the economy.
    • Multiplier Effect: It suggests that an increase in government spending can lead to a larger increase in overall economic output.
  3. 3
    19
    votes

    Marxist economics

    Karl Marx
    This theory focuses on the exploitation of labor by capitalists and the class struggle between the working and ruling classes. It has been influential in socialist and communist movements.
    Marxist economics is a branch of economic theory that is based on the ideas and principles developed by Karl Marx, a German philosopher, economist, and political theorist. It focuses on the relationship between labor, capital, and class struggle. Marxist economics seeks to analyze and understand the capitalist mode of production and advocate for the elimination of class-based society through the establishment of socialism and eventually communism.
    • Labor Theory of Value: The value of a commodity is determined by the amount of socially necessary labor required to produce it.
    • Class Struggle: Society is characterized by the constant conflict and struggle between the working class (proletariat) and the owning class (bourgeoisie).
    • Surplus Value: The difference between the total value produced by workers and the value they receive in wages. This surplus value is appropriated by the capitalist class.
    • Means of Production: The physical and non-physical inputs used in the production process, including land, resources, technology, and machinery.
    • Exploitation: Marxist economics critiques capitalist systems, arguing that workers are exploited due to the extraction of surplus value by capitalists.
  4. 4
    9
    votes

    Austrian economics

    Carl Menger
    This theory emphasizes the role of individual action and the market in determining prices and allocating resources. It is often associated with libertarianism.
    Austrian economics is a school of economic thought that originated in late 19th century Austria. It emphasizes the free market, individualism, and the role of subjective human action in economic decisions. Austrian economists reject central planning and interventionist policies, arguing instead for limited government involvement in the economy.
    • Methodology: Praxeology - the study of human action and its purposeful behavior
    • Subjective Value: Value is determined by individuals' preferences and choices
    • Spontaneous Order: Economic order emerges naturally from individuals pursuing their own interests
    • Time Preference: People generally prefer present goods over future goods, creating the basis for interest rates
    • Business Cycle Theory: Emphasizes the role of central bank intervention in creating boom and bust cycles
  5. 5
    17
    votes

    Institutional economics

    Thorstein Veblen
    This theory emphasizes the importance of institutions, such as laws and regulations, in shaping economic behavior. It is often associated with development economics.
    Institutional economics is an economic theory that examines how institutions, such as social norms, customs, and laws, shape economic behavior and outcomes. It focuses on understanding the role of institutions in creating and sustaining efficient and prosperous economies.
    • Interdisciplinary Approach: Institutional economics integrates insights from various disciplines including economics, sociology, anthropology, and political science.
    • Emphasis on Institutions: The theory highlights the importance of formal and informal institutions in shaping economic behavior and outcomes.
    • Holistic Perspective: It considers economic phenomena as embedded within social, cultural, and historical contexts.
    • Evolutionary View: Institutional economics emphasizes that institutions evolve and adapt over time in response to societal changes and challenges.
    • Institutional Complementarities: It recognizes the interdependence and complementarity of different economic and social institutions.
  6. 6
    9
    votes

    Game theory

    John von Neumann
    This theory uses mathematical models to analyze strategic interactions between individuals or groups. It has been applied to a variety of economic and social phenomena.
    Game theory is a branch of mathematics and economics that studies the strategic interactions between multiple players or decision-makers. It provides a framework to analyze and predict the outcomes of such interactions and helps in making rational decisions in competitive situations.
    • Strategic Interactions: Examines how choices and actions of one player affect the choices of other players.
    • Payoff Matrix: Represents the outcomes and payoffs associated with different choices made by players.
    • Nash Equilibrium: A solution concept that identifies stable outcomes when no player has an incentive to unilaterally change their strategy.
    • Cooperative Game Theory: Focuses on how players can cooperate to achieve mutually beneficial outcomes.
    • Non-Cooperative Game Theory: Analyzes strategic interactions where cooperation between players is not assumed.
    Game theory in other rankings
  7. 7
    12
    votes
    This theory incorporates insights from psychology to explain why individuals may not always act rationally. It has gained popularity in recent years.
    Behavioral economics is a branch of economics that combines insights from psychology, sociology, and other social sciences to understand how individual economic decisions are made. It recognizes that individuals do not always behave in completely rational ways as assumed by traditional economic theory, but instead, their behavior is influenced by cognitive biases, heuristics, and social norms. Behavioral economics aims to provide a more realistic understanding of economic decision-making and improve economic models and policies to account for these behavioral factors.
    • Cognitive biases: Behavioral economics explores various cognitive biases that affect decision-making, such as loss aversion, confirmation bias, anchoring bias, and framing effects.
    • Heuristics: It examines the use of mental shortcuts or heuristics that individuals rely on to make decisions, such as availability heuristics and representativeness heuristics.
    • Social norms: Behavioral economics recognizes the influence of social norms on individuals' behavior, including social preferences, fairness considerations, and conformity.
    • Nudge theory: It incorporates the concept of 'nudging' individuals towards making better choices by structuring the decision-making environment.
    • Loss aversion: Behavioral economics highlights the tendency for individuals to strongly prefer avoiding losses over acquiring gains, often leading to risk-averse behavior.
  8. 8
    13
    votes

    Ecological economics

    Herman Daly
    This theory emphasizes the interdependence between the economy and the environment. It argues that economic growth should be limited in order to preserve natural resources.
    Ecological economics is an interdisciplinary field of study that seeks to understand the interactions between the economy and the environment, with a focus on sustainability and the well-being of both humans and the natural world. It aims to provide an alternative economic framework that recognizes the finite nature of resources and the importance of maintaining ecological balance.
    • Focus: Sustainability and environmental well-being
    • Interdisciplinary Approach: Combines knowledge from economics, ecology, and other social and natural sciences
    • Finite Resources: Recognizes the limits of resource availability and promotes sustainable resource management
    • Ecological Balance: Emphasizes the need to maintain ecological integrity and prevent irreversible environmental damage
    • Ethical Stance: Values equity, fairness, and social justice in economic decision-making
  9. 9
    5
    votes

    Post-Keynesian economics

    Joan Robinson
    This theory builds on Keynesian economics, but places more emphasis on the role of power and institutions in shaping economic outcomes. It is often associated with heterodox economics.
    Post-Keynesian economics is an economic theory that emerged as a reaction to some of the key assumptions of Neo-Keynesian economics. It focuses on the interpretation of Keynesian ideas and their further development, emphasizing the role of uncertainty, money, and distribution in the economy. Post-Keynesians reject the classical idea of market efficiency and assume that individual expectations play a crucial role in shaping economic outcomes.
    • Emphasis on uncertainty: Post-Keynesians highlight the inherent uncertainty in economic decision-making, emphasizing the limitations of mathematical modeling and the importance of psychological factors.
    • Role of money and finance: Post-Keynesians emphasize the significance of money, banking, and finance in shaping economic activity, focusing on the impact of credit creation, interest rates, and financial instability.
    • Distributional issues: Post-Keynesians analyze the distribution of income and wealth in the economy, highlighting the influence of power relationships and institutions in determining economic outcomes.
    • Effective demand: Post-Keynesians emphasize the importance of aggregate demand and argue that changes in consumption and investment behavior can lead to fluctuations in output and employment.
    • Rejects market efficiency: Post-Keynesians challenge the classical assumption of market efficiency and highlight market imperfections, such as imperfect competition and informational asymmetry.
  10. 10
    7
    votes

    Feminist economics

    Dr. Julie A. Nelson
    This theory applies feminist insights to economic analysis, such as the role of gender in shaping economic outcomes. It has gained popularity in recent years.
    Feminist economics is an economic theory that focuses on understanding and addressing gender-based inequalities in the economy. It seeks to analyze how economic systems perpetuate gender discrimination and aims to bring about more equal outcomes for men and women.
    • Gender analysis: Incorporates gender as a category of analysis to understand economic processes and outcomes.
    • Unpaid care work: Recognizes and values unpaid care work, such as household chores and childcare, as important economic contributions.
    • Power relations: Examines power relations within households, workplaces, and societies to understand how they shape economic decisions and outcomes.
    • Intersectionality: Considers how gender intersects with other social identities, such as race, class, and sexuality, to influence economic experiences.
    • Income distribution: Examines how gender affects income distribution, with a focus on closing the gender wage gap.

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Ranking factors for popular economic theory

  1. Relevance
    The economic theory should be applicable and relevant to the current economic environment and global economy. It should help in understanding and explaining real-world economic scenarios and provide practical solutions or recommendations.
  2. Acceptance
    The theory should be widely accepted by economists, policymakers, and academia. This implies that it has been tested, debated, and stood the test of time, gaining recognition as a legitimate and useful theory.
  3. Impact
    The economic theory should have had a significant impact on economic thoughts, policies, and decision-making. It should have influenced or contributed to the development of new ideas, approaches, or schools of thought in economics.
  4. Efficacy
    The theory should have successfully demonstrated its usefulness and effectiveness in explaining various economic phenomena and making accurate predictions or recommendations. This can be seen through empirical studies, real-world applications, or policy successes.
  5. Theoretical Soundness
    The economic theory needs to be logically consistent and built on solid foundations, providing well-reasoned arguments and explanations for its claims and conclusions.
  6. Simplicity
    The theory should ideally be easy to understand and communicate, facilitating its accessibility to a broader audience, including students, policymakers, and the general public.
  7. Flexibility
    The economic theory should be adaptable to changes in the economic environment and applicable to different contexts, countries, and situations. It should not be limited in scope and applicability.
  8. Innovativeness
    The theory should introduce new concepts, perspectives, or approaches to economic analysis, contributing to the development and progression of economic thought and opening up new areas of research and debate.
  9. Comprehensiveness
    The economic theory should cover a wide range of economic topics and issues, addressing various aspects of the economy and providing insights into multiple areas of economic study.
  10. Policy Relevance
    The economic theory should have the ability to inform and guide policy discussions, recommendations, and decisions, ultimately having a positive impact on the well-being of society.

About this ranking

This is a community-based ranking of the most popular economic theory. We do our best to provide fair voting, but it is not intended to be exhaustive. So if you notice something or economic theory is missing, feel free to help improve the ranking!

Statistics

  • 1396 views
  • 159 votes
  • 10 ranked items

Voting Rules

A participant may cast an up or down vote for each economic theory once every 24 hours. The rank of each economic theory is then calculated from the weighted sum of all up and down votes.

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More information on most popular economic theory

Economic theory refers to the set of ideas and concepts that attempt to explain how economies work and how resources are allocated. There are several economic theories that have been developed over time, each with its own set of assumptions and principles. Some of the most popular economic theories include classical economics, Keynesian economics, and monetarism. Classical economics, for example, argues that markets are self-regulating and that government intervention should be limited. Keynesian economics, on the other hand, suggests that government intervention is necessary to stabilize the economy during times of crisis. Monetarism emphasizes the role of money supply in regulating economic activity. Each of these theories has its own strengths and weaknesses, and economists continue to debate which one is the most effective in addressing economic issues.

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