The theory of marginalism stands as one of the most important turning points in the history of economic thought. At its core, marginalism concerns the idea that economic decisions are made at the margin—that is, the value of goods, services, or productive factors is determined not by their total or average contribution, but by the incremental benefit or cost associated with a small change in their use. This approach, which gained prominence in the late nineteenth century, transformed classical political economy into modern economics by introducing a new analytical framework for understanding value, utility, and decision-making.
Read MoreI hope you’re enjoying the 2023 Chat-GPT advent calendar even if it is quite a deviation from the content normally posted here. Fret not, I will pepper the flow of advent stories with some economics, and a lookahead to markets next year.
I really enjoyed @EconTalker's conversation with @tylercowen, the founder of the most widely read economics blog out there, reminding us that there is still value in reading the grand old masters of economics. I enjoyed re-reading most of Keynes’ the General Theory for my essay on fiscal policy, and it was also fun to remind myself about Milton Friedman’s permanent-income-hypothesis for the essay on the life cycle hypothesis. But in reality, I fall foul of Tyler’s accusation of an economist who is probably not as well acquainted with the classics as I should be. I have read very little of Smith for example, I find Hayek very difficult to read, and as an economist interested in demographics, I also regret to say that I have only read few parts of Malthus in the primary versions. Fortunately for me and others, Tyler has made his new his new book—"GOAT" of economics—freely available, and I am looking forward to dig in over Christmas.
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