FROM THE HISTORY OF ECONOMIC THOUGHT

Межсессионное задание № 2 для студентов 1 курса,

ФЭП , специальность – ЭКОНОМИЧЕСКОЕ ПРАВО , ЗФПО

PART 1. FROM THE HISTORY OF ECONOMIC THOUGHT

Study and translate the list of active vocabulary on the situation in a written form.

1. political economy

2. contemporary economic thought

3. economics

4. home economics

5. to have the roots in

6. to emerge

7. the classical school of economics

8. laissez fair

9. government direction and regulation

10. price mechanism

11. an “invisible hand”

12. a self-regulating and self-adjusting mechanism

13. to tend to a state of equilibrium

14. aggregate demand

15. to allocate resources

16. to determine the level of economic activity

17. government intervention into economy

18. fiscal and monetary policies

19. economic demand, growth and prosperity

a. to stimulate economic demand, growth and prosperity

20. economic recessions and depressions

a. to mitigate negative effects of economic recessions and depressions

21. globalization

22. the emergence of a global economy

Match the halves from the list A (1-7) with their possible endings (the list B, a-g) to make word combinations.

Use the word combinations from 1.1 in the following sentences. Change the verb / noun form where necessary.

1) _________ concerns thinkers and theories in the field of political economy and economics from the ancient world right up to the present day.

2) But economics was not considered ________ until the nineteenth century.

3) First it was considered as _______ (home economics) dealing with such matters as the management of slaves and the allocation of manure.

4) An understanding of the different approaches to economics, the causes for those differences and how they have evolved over time provides a historical and philosophical context that encourages a more critical analysis of current ______ and their applications.

5) ______, which is regarded as the first school of economic thought, is associated with the 18th century Scottish economist Adam Smith, and those British economists that followed, such as Robert Malthus and David Ricardo.

6) As contemporary economic thought deals with the issues of globalization and the _______, economists have turned to the multitude of other disciplines which, like economics, developed independently.

7) Economic history is different from history of economic thought. It is the study of the economic aspects of societies in the past; the history of the economic _______ (land, labour and capital); or the examination of the past performance of economies.

Fill in the gaps choosing from the box.

During the 16^th – 18^th centuries (1) ______was an economic system that dominated the major European trading nations. It was based on the idea that national wealth and power were best served by increasing exports and collecting precious metals in return. Domestically, this led to some of the first instances of significant (2) _______ and control over the economy. Internationally, mercantilism encouraged the many European wars of the period.

In 1776 the Scottish moral philosopher (3) ______ published the first edition of his work «Inquiry into the Nature and Causes of (4) _____», and economics soon became an independent science. Adam Smith and his followers Robert Malthus and David Ricardo represent the first school of economic thought – (5) _____. The main idea of the Classical school was that markets work best when they are left alone. (6) _______ could and should replace government direction and regulation in economics, Smith argued. Markets should be left to work because (7) ______ acts as a powerful 'invisible hand' to allocate resources to where they are best employed. The economic system is a (8) _______ mechanism that, like the human body, tends naturally toward a state of equilibrium if left to itself. 

The classical doctrine dominated economic thinking in all advanced economies for the next 150 years. It was first seriously challenged by the great English statesman and economist (9) _______, who claimed to see in the Great Depression of the 1930s the evidence that the economic system was not self-adjusting. The economist and his followers argued that without continued (10) ________ the economic system couldn’t operate at the level of activity that is required to achieve full employment of labour and other resources. He advocated government’s use of (11) ________ to stimulate economic demand, growth and prosperity and mitigate the negative effects of (12) ________.

Read and translate the text “ From the History of Economic Thought ” in a written form.

FROM THE HISTORY OF ECONOMIC THOUGHT

Economics as a science has its roots in the early Greece and Rome. First it was considered as a branch of domestic science (home economics) dealing with such matters as the management of slaves and the allocation of manure. Greek writers studied the problems of wealth acquisition, private or public property. During the sixteenth, seventeenth, and eighteenth centuries mercantilism dominated as an economic system. It was based on the idea that national wealth and power were best served by increasing exports and collecting precious metals in return.

Economics was not considered a separate discipline until the 19th century, and it is the Scottish philosopher Adam Smith who is often named the father of modern economics. In 1776 Adam Smith published his work «Inquiry into the Nature and Causes of the Wealth of Nations». Adam Smith and his followers Robert Malthus and David Ricardo represent the first school of economic thought - The Classical School. The main idea of the Classical school was that markets work best when they are left alone, without interference of government. Laissez fair could and should replace government regulation in economics. The economic system is a self-regulating mechanism, and the price mechanism acts as a powerful 'invisible hand' to allocate resources to where they are best employed.

The classical doctrine dominated economic thinking for the next 150 years. It was first seriously challenged by the great English economist Lord John Maynard Keynes. Keynes and his followers argued that the economic system was not self-adjusting. Without continued government intervention the economic system couldn’t achieve full employment of labour and other resources. That’s why Keynes advocated government’s use of fiscal and monetary policies to stimulate economic demand and growth and mitigate the negative effects of recessions and depressions.

Changes in economic thought have always accompanied changes in the economy. Economics has developed different methods for studying and explaining how individuals, businesses and nations use available economic resources in meeting their wants. Contemporary economic thought also concerns globalization and a global economy.