Stigin It To The Man George Stigler - 788 Words

George Stigler (1911-1991) was a neoclassic economist and an important figure in the development of many of our currently used economic principles. Stigler taught at the University of Chicago, where he worked closely with Milton Freidman. George Stigler was said to be quite brilliant in his field and yet, he kept a confident wit about himself that was said to help his students enjoy and understand economics. (Sowell) Comparatively, Stigler was a sort of renascence man in the economic field, as he was well studied, versatile, and involved in many facets of economic thought. Stigler’s drive to dispute and negate old economic theory, while further quantifying existing theory, is what most would argue defined his economic frame of mind.†¦show more content†¦Price Theory is the essence of economics. It attempts to explain the utility of consumers and how that utility correlates with the supply and demand curves, and how they all fluctuate, ultimately seeking market equilib rium according to the market price. Cambridge Universities online dictionary defines Price Theory as â€Å"The study of how prices are decided and how they go up and down because of economic forces such as changes in supply and demand: Still central to much of contemporary price theory is the model of perfect competition.† Price Theory is widely accepted as the heart of economics and is taught in nearly every school in unison with the neoclassical school of economic thought. (Neoclassical Economics) The neoclassical school of thought is said to be an evolution of the classical school of economic thought, which was originally proposed by Adam Smith in the 18th century. Price theory and the perfect competition model remain central to both schools of thought, however neoclassicism incorporates the additional ideas of utility, or perceived value, and marginalism, or the extra use gained from each incremental increase. As neoclassical economics is essentially determined by the utility on a consumer scale, it has come to be known as the study of microeconomics. (Neoclassical Economics) Additionally incorporated into neoclassical economics is the theory of rational expectations.