01 March, 2013

Economic Thought

This post is on topic 1 of the General Economics II of the IES examination. 

Let's go through the questions in the past 4 years:-

Explain the concept of "tableu Economique" as propounded by the physiocrats. (5 marks,50 words question)

State briefly the key propositions of Monetarist School of Macro Economics. (15 marks,150 words)
Examine the circumstances that gave rise to the mercantilism and those that brought about its decay. Is the world going back to mercantilism in a new form? (30 marks, 500 words)

"Adam Smith's concept of 'Invisible Hand' teaches us that everything in an economy can be left to market forces." Discuss. (15 marks,150 words)

What were the mercantilist's views on trade? How does their concept of national wealth differ from today's view?

A mastery in this section can also equip us to supplement our answers for questions from other parts of the paper, apart from the direct questions from this section. An example of such a question is the following- 
Why did Ricardo argue that a capitalist economy would sooner or later reach a 'stationary state’? (Question from 2011 question paper).

A good way to approach this section would be taking on the different economic thoughts and schools, viz. Mercantilism Physiocrats, Classical, Marxist, Neo-classical, Keynesian and Monetarist schools of thought separately and identifying its chief components. The relative importance of this topic in terms of direct questions in the General Economics II paper is less than that of sections of "Theory of employment, Output, Inflation, Money and Finance", "Economic Growth and Development", "International Economics" etc. This fact has to be kept in mind while studying this topic. Hence, notes summarizing on the key features of every school of thought would be useful. Special attention should also be given to the key terms and ideas of each school. A note on the different proponents of the school of thought and the relevance of the particular thought would make up a perfect mix for the preparation on this topic.

For example, while studying on mercantilism, we can start with the factors causing and shaping mercantilism (like cultural, economic, religious and political factors), chief elements of the mercantilist thought (like nationalism, importance to precious metals, Balance of Trade etc.), Mercantilist views on specific subjects (like population, production, taxation etc.) and its key writers/proponents (JB Colbert, Sir Thomas Mun etc.). We can also look upon the relevance and if there is any debate on mercantilism in modern times (like if there exists any kind of mercantilism in the modern world).

Chronological the next school of thought (Physiocracy) would be starting with the background of this school of thought. Hence, while studying physiocracy, we will also understand the criticism/problems associated with mercantilism.

Any standard book or website (like Wikipedia) can be used as reference to this topic.

1 comment:

  1. Hi, would you suggest a good author for the Topic: Economic thought?