30170 - HISTORY OF ECONOMIC THOUGHT

The course offers a panoramic and orienting view of the evolution of economic theory from Adam Smith to the later 20th century. After completing the course, students should be able to:

• Identify the major ideas associated with each school or author studied, and thereby comprehend the origins of contemporary economic theory.
• Evaluate similarities and differences across schools, and understand how methodological issues have often shaped the development of economic ideas.
• Use differences across schools and paradigms to think critically about the underlying assumptions of economic theories learned in other courses.

Course motto (from Keynes): "A study of the history of opinion is a necessary preliminary to the emancipation of the mind. I do not know which makes a man more conservative to know nothing but the present, or nothing but the past".

• Classical political economy (1776-1870): Smith, Ricardo, Marx.
• The marginal revolution (1871-1874): Menger, Jevons, Walras.
• Consolidation of marginalism (1874-1900): Böhm-Bawerk, Edgeworth, Wicksteed, Marshall.
• Developments in utility theory and demand analysis (1900-1940): Pareto, Slutsky, Hicks & Allen, Samuelson, Friedman.
• Monetary and business cycle theories (1900-1936): Fisher, Pigou, Wicksell, Hayek.
• Keynes: from the Classical theory to the General Theory (1923-1936).
• IS-LM macroeconomics and the neoclassical synthesis (1936-late 1960s): Hicks, Modigliani, Samuelson.
• Monetarism, new classical macroeconomics, and real business cycle theory (late 1960s-2000): Friedman, Lucas & Sargent, Kydland & Prescott.
• Birth and early developments of game theory (1928-late 1960s): von Neumann, Morgenstern, Nash.
• The axiomatization of utility theory and the analysis of risky decisions (1940-1960): Debreu, Savage, Allais, Ellsberg.
• The rise of behavioral economics (1980-2000): Kahneman & Tversky.

Students can choose between two different ways of taking the exam:

• Students can take a written exam, in which they are asked to answer questions or discuss topics addressed in class; the written exam can be broken in two partial exams.
• Students who attend a sufficient number of classes have also the option of writing a brief essay on an assigned topic, and discuss orally with the teacher the essay and the topics covered in the course.

• I. Moscati, Lecture Notes on the History of Economic Thought. From Classical Political Economy to Behavioral Economics. Egea, Milano 2012.
• Original texts available on Learning Space.

Familiarity with basic micro- and macroeconomic theory