Positive economic theory can help policymakers implement normative value judgments. For example, it can describe how the government can impact inflation by printing more money, and it can support ...

Learn about the "invisible hand," a key economic concept introduced by Adam Smith, and its implications in free markets.

Monetary theory posits that a change in money supply is a key driver of economic activity. A simple formula, the equation of exchange, governs monetary theory: MV = PQ.

A common theory that guides financial investment strategies may be a handy tool to protect an endangered Puerto Rican frog. A new study uses modern portfolio theory to identify future "investments" in ...

His most famous work, The General Theory of Employment, Interest and Money, was published in 1936. But its 1930 precursor, A Treatise on Money, is often regarded as more important to economic thought.

For example, the claim that an economic model is “built around the Phelps-Winter model of the product market, combining it with a version of the Calvo-Bowles shirking model of the labour market ...

When I write and talk about economists’ role in policy making, I often refer to what I call the “lamppost theory” of economic policy. The theory holds that politicians use economics the same way a ...

Economic theory’s elusive mixture of “scientific” and “artistic” elements is probably what attracted me to it in the first place.