Classical and Neoclassical Economics: Differences and Similarities

Two Distinct Approaches

Classicism and Neoclassicism are two distinct approaches to economics, each with its own unique set of assumptions and implications. The most significant distinction between the two is one of timing. Classicism emerged in the 18th century, while Neoclassicism is a modern revival of the aesthetics and ideas of classical Greece and Rome.

Key Differences

One of the key differences between classicism and neoclassicism is their focus on government intervention. Classical economists believe that the government should play a minimal role in the economy, while neoclassical economists believe that the government can play a more active role in promoting economic growth and stability. Another key difference between the two is their view of the role of labor. Classical economists believe that labor is a key factor in economic growth, while neoclassical economists believe that capital is more important.

Similarities

Despite their differences, classicism and neoclassicism share some important similarities. Both approaches believe in the importance of individual liberty and free markets. Both also believe that the economy is governed by natural laws that can be understood and used to promote economic growth.

Conclusion

Classicism and Neoclassicism are two distinct approaches to economics, each with its own unique set of assumptions and implications. The most significant distinction between the two is one of timing. Classicism emerged in the 18th century, while Neoclassicism is a modern revival of the aesthetics and ideas of classical Greece and Rome.