Major Economic Theories or Models Studied in Humanities Subjects in Class 12

1. Classical Economics:
- Developed in the 18th and 19th centuries by economists such as Adam Smith and David Ricardo.
- Based on the belief in free markets and the idea that individuals pursuing their self-interests will lead to overall economic prosperity.
- Emphasizes the role of supply and demand, the importance of competition, and the concept of the "invisible hand" guiding the economy.

2. Keynesian Economics:
- Developed by John Maynard Keynes in response to the Great Depression of the 1930s.
- Argues that government intervention is necessary to stabilize the economy and overcome recessions.
- Advocates for active fiscal policies, such as government spending and taxation, to stimulate demand and create employment.

3. Monetarism:
- Developed by economists such as Milton Friedman in the mid-20th century.
- Emphasizes the role of money supply in influencing economic activity.
- Argues that controlling the money supply is crucial to maintaining price stability and promoting long-term economic growth.

4. Neoclassical Economics:
- Emerged in the 19th and 20th centuries as a response to classical economics.
- Builds upon classical economics but incorporates mathematical models and optimization techniques.
- Focuses on the behavior of individuals and firms in markets and emphasizes the efficiency of resource allocation.

5. Austrian School of Economics:
- Developed by economists such as Ludwig von Mises and Friedrich Hayek.
- Advocates for a free-market economy with minimal government intervention.
- Emphasizes the importance of subjective value and the role of entrepreneurship in driving economic progress.

6. Institutional Economics:
- Developed by economists such as Thorstein Veblen and John R. Commons.
- Examines the impact of institutions, such as laws, customs, and social norms, on economic behavior.
- Focuses on the influence of institutions on shaping economic institutions, property rights, and distribution of resources.

7. Behavioral Economics:
- Integrates insights from psychology into economic analysis.
- Studies how individuals' cognitive biases and emotions influence their economic decision-making.
- Challenges the assumption of rationality in traditional economic models, highlighting the importance of psychological factors.

8. Development Economics:
- Focuses on the study of economic development in developing countries.
- Examines issues related to poverty, inequality, economic growth, and sustainable development.
- Utilizes various theories and models to understand the challenges and potential solutions for economic development.

These economic theories and models provide different perspectives and frameworks for understanding and analyzing economic phenomena. They help students develop critical thinking skills and gain a deeper understanding of the complex dynamics of the economy.