Economic Paradigm: What it is and Examples
Economic paradigm
An economic paradigm is a set of rules, theories, points of view, thoughts, customs, beliefs, and more, that allow the structuring of scientific ideas or reasoning.
Cambridge Dictionary defines paradigm as follows: “A set of theories that explain the way a particular subject is understood at a particular time.” (1)
It is a way of seeing the world that allows to answer the questions that economic science asks.
Examples of economic paradigms
The most important paradigms in economics answer questions about the economic world:
- Ideas about the legal-political and social framework: Depending on the ideology, one of the predominant ones is, that constitution is what guides a nation and must be followed and respected.
- Premises on the laws of market: The price system is a good way to organize economic activity, where suppliers and demanders establish a market price by interacting to maximize their profit.
- Premises on government intervention in the economy: The State must participate in the extent that it seeks to correct market errors and improve the price system and distribution of resources.
These are some of the premises that prevail in economic theory and are the basis of the study of the phenomena that occur in society regarding distribution, production, and consumption of resources.
These are the most widespread premises, because each economic school of thought has its own.
The economic school of thought are:
- Mercantilism.
- Physiocracy.
- Liberalism.
- Marxism or socialism.
- Neoclassicism.