EconAir

  Introduction to Economic Theory   It’s not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. Charles Darwin                                               Introduction and Summary Economic theory, generalizations about economies, and economic history began as attempts to understand the Industrial Revolution. The economic theory posts on this blog describe and analyze economic development and economic growth since the start of the Industrial Revolution in the late 1700s.  Some writers describe the current economic trends as the Fourth Industrial Revolution. Other observers and commentators believe that information and communication technology and applications have become so central to the economy that we are in the Information Revolution. And others believe that we are at the beginning of the Biotechno...

Nicola Tesla There has been a debate in economics on whether innovation is exogenous (outside the economy) or endogenous (inside the economy).   This is another one of those dichotomies that obscures explanations of economic processes. This is a stylized narrative of the path of economic innovation, the dynamics of the modern, industrial economic system.   The resulting economic structure is mostly oligopoly, the domination of markets by large corporations. Innovation begins with public knowledge, often scientific or mathematical discoveries that sometimes do not seem to have any practical value.   Imaginary numbers, general equations of electromagnetism, the Second Law of Thermodynamics, Brownian motion, E=mc**2, the structure of DNA, the conductivity of solids, quantum superposition, etc.   Some  scientists and inventors begin to see possible applications of this scientific knowledge.   In the 20 th century, they are often funded by ...