What are Economic Theories?

What are Economic Theories?

Economic theories try to explain economic phenomena, to interpret why and how the economy behaves and what is the best to solution – how to influence or to solve the economic phenomena. They are comprehensive system of assumptions, hypotheses, definitions and instructions what should be done in a certain economic situation. In principle, the approach to economic theory is divided into positive and normative.

All economic theories used to explain specific situations or problems in the economy of some of its models. These models of economic systems try to explain the situation and solve it using approaches that are typical of the economic theory (eg. Keynesian theory subdued stimulate the economy through government money).

What economic theory is correct, the right one?

There are multiple approaches, schools, hypotheses interact and in many ways and often contradict. Economics is not an exact science and how it develops (during the time), evolves and changes with the theory. It’s about access (like politics or philosophy) – and there never will be the only one true and correct economic theory.

What are the economic theories?

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 0-9 & other


ability-to-pay principle

absolute advantage theory

absolute income hypothesis

acceleration principle

adaptive expectations

adding-up problem

administered pricing

adverse selection

Agency theory

aggregate demand theory

Allais paradox


Ansoff Matrix

arbitrage pricing policy

Arrow-Debreu model

asymmetrical information

average cost pricing

axiomatic theories


balanced budget multiplier

Behavioral theory of the firm

benefit approach principle

Bernoulli’s hypothesis

Bertrand duopoly model

bilateral monopoly



Blue Ocean (Strategy)

bounded rationality


business cycle


Cambridge capital controversies

capital asset pricing model

capital logic

capital theory


catastrophe theory

central place theory

CES production function

class struggle

classical macroeconomic model

classical theory of money

clubs, theory of

co-operative games theory

Coase theorem

Cobb-Douglas production function

cobweb theory

collective bargaining theory

collusion theory


commodity theory of money

comparative costs

compensation principle

Competitive Advantage

Competitive Advantage (Theory)

composite commodity

Condorcet’s principle

consumer demand, theory of

consumer surplus

contestable markets theory

Contingency Theory

continuity thesis

contract theory

convergence theory

core, theory of the


cost-benefit analysis

cost-push inflation

countervailing power

Cournot duopoly model

Cramer’s rule

crisis of capitalism

crowding hypothesis


currency principle

customs union theory

cyclical theory


decision theory

DeLorean theory

demand for money theory

demand theory

demand-pull inflation

demographic transition

dependency theory

differential rent theory

diminishing returns, law of

disequilibrium theory

distribution theory


Diversification strategy

dual decision hypothesis

dual economy theory

dual labor market theory

duopoly theory


economic liberalism

economic methodology

economic theory of politics

economic theory of the state

efficient market hypothesis

Engel’s law

entitlement theorem

envelope theorem

equal sacrifice theory

equilibrium theory

Euler’s theory

Evolutionary Theory of the Firm




factor-price equalization theorem

falling rate of profit

fine tuning

firm, theory of the

fixed point theorems

forced saving

free banking theory

free rider problem

fundamental disquilibrium


game theory

general equilibrium theory

general strike

general theory of employment, interest and money

Gibrat’s rule of proportionate growth

Giffen paradox

golden rule of capital accumulation

gravity model

Gresham’s law

group theory

growth of the firm, theory of the

growth-pole theory


Harrod-Domar growth model

Heckscher-Ohlin trade theory

Hicks-Hansen model

historical materialism

Hotelling’s law

human capital theory

Hypercompetition theory


imperfect competition


impossibility theorem

income determination, theory of

income distribution, theory of

information theory

input-output analysis

insider-outsider wage determination

Institutional Theory

internal and external balance

invisible hand (theory)

iron law of wages

IS-LM model


just price


Keynesian economics

Kondratieff cycles


labor force participation

labor market discrimination

labor theory of value

Laffer curve


Law of diminishing returns

large numbers, law of

Le Chatelier principle


least cost location theory

Leontief paradox

life-cycle hypothesis

Lindahl equilibrium

linear programming

List of Economic theories and concepts

loanable funds theory of the rate of interest

long wages

lump-of-labor theory of wages

Lyapunov’s theorem


machinery question

Malthusian population theory

managerial theories of the firm

marginal cost pricing

marginal efficiency of capital

marginal productivity theory of distribution

marginal utility theory

mark-up pricing

Market penetration strategy

Market development strategy

market socialism

markets, law of

Marshall-Lerner principle


material balances principle

measure theory


Modigliani-Miller theory of the cost of capital


monopolistic competition


monopoly capitalism

moral hazard





Nash equilibrium

national income


natural and warranted rates of growth

natural monopoly of economics

natural rate of unemployment

negative income tax

neo-classical growth theory

neo-classical theory

neo-Ricardian theory

new class

new classical macroeconomics

non-accelerating inflation rate of unemployment

non-competing groups

non-nested hypothesis

non-profit organization


occupation segregation

Okun’s law

oligopoly theory

opportunity cost

optimal tariff theory

option pricing theory

Organizational Ecology (Theory)

Organizational learning theory

Organizational Power (Theory)

Organizational structure (Theory)

organization theory

own rate of interest


paradox of thrift

paradox of value

paradox of voting

Pareto efficiency

Pareto optimality

partial equilibrium theory

peak-load pricing

perfect competition

permanent income hypothesis

Phillips curve


Pigou effect

political business cycle

portfolio selection theory

Prebisch-Singer thesis

price discrimination

Privacy Policy


Product development strategy

product life-cycle theory

Product market development matrix / Product market matrix / Product-market strategy

production, theory of

profits, theories of


Property Rights (Theory)

public choice

public utility pricing

purchasing power parity


quantity theory of money

queuing theory


Ramsey pricing

random walk hypothesis

rational expectations theory


Rawls theory of justice


real bills doctrine


regulatory capture

relative income hypothesis

rent seeking

Resource dependence (theory)

Resource-based theory

returns to scale

revealed preference theory

Ricardian equivalence theorem

roundabout method of production

Rybczynski theorem



Say’s law

Scitovsky paradox

screening hypothesis

search theory

second best, theory of

secular stagnation theory

segmented labor market theory

shadow pricing


Slutsky’s theorem

small is beautiful principle

social welfare function

Solow economic growth

specie-flow mechanism

St Petersburg paradox

stationary state

stock-flow analysis

structure-conduct-performance theory

substitution theory

sunspot theory

supply-side economics

surplus value


Systems Theory


tax incidence

technological gap theory

term structure of interest rates


Tiebout hypothesis

time preference theory of interest

trade cycle

Transaction Cost Economics

trickle-down theory

turnpike theory



underconsumption theory



variable proportions, law of

vent for surplus

Verdoorn’s law

Visible Hand (Theory)

VRIN model or VRIO framework


wages fund doctrine

Wagner’s law

Walras’s stability

Weber’s theory of the location of the firm

Wicksell’s theory of capital





0-9 & other

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