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Theory that describes how an individual's pursuit of economic self-interest benefits society as a whole. Founded by Adam Smith.

An economic theory stating that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability. Founded by John Maynard Keynes.

A school of thought that emphasizes the role of governments in controlling the amount of money in circulation. Founded by Milton Friedman.

An economic theory which argues that economic growth can be most effectively created by lowering taxes and decreasing regulation. Founded by Arthur Laffer.

An economic idea that posits that individuals make decisions based on their rational outlook, available information, and past experiences. Founded by John F. Muth.

An investment theory that states it is impossible to 'beat the market' because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information. Founded by Eugene Fama.

A method of economic analysis that applies psychological insights into human behavior to explain economic decision-making. Founded by Daniel Kahneman and Amos Tversky.

An economic problem in which every individual tries to reap the greatest benefit from a given resource. As the demand for the resource overwhelms the supply, every individual who consumes an additional unit directly harms others who can no longer enjoy the benefits. Initially illustrated by Garrett Hardin.

A school of economic thought that advocates for the reduction of government intervention and a purer form of capitalism. Founding economists include Carl Menger, Ludwig von Mises, and Friedrich Hayek.

An economic law referring to the ability of any given economic actor to produce goods and services at a lower opportunity cost than other economic actors. Founded by David Ricardo.

An economic theory that suggests that old ways of doing things are destroyed and replaced by new and innovative ways, driving economic growth. Founded by Joseph Schumpeter.

A theory that suggests that financial markets are inherently unstable and are subject to rapid changes due to the financial behavior of market participants. Founded by Hyman Minsky.

A theory which posits that the general price level of goods and services is directly proportional to the amount of money in circulation. Founded by Irving Fisher.

A fundamental macroeconomic model that describes the relationship between total income and spending in an economy. Founded by John Maynard Keynes.

A theory of consumer spending which states that people will spend money at a level consistent with their expected long term average income. Founded by Milton Friedman.

The theory suggests that for a given investor there is a trade-off between yield and liquidity that reveals their preference for holding cash versus less liquid investments. Founded by John Maynard Keynes.

A behavioral economic theory that describes the way people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are uncertain. Founded by Daniel Kahneman and Amos Tversky.

An economic principle stating that 'bad money drives out good'. It is typically used when there is a legal tender which artificially overvalues one type of money and undervalues another. Founded by Sir Thomas Gresham.

An economic theory which argues that improvements in productivity can be linked directly to a faster pace of innovation and investments in human capital. Founded by Paul Romer.

An economic theory that suggests when a government tries to stimulate an economy by increasing debt-financed government spending, demand remains the same because the public saves its money to pay for future tax increases that will be used to pay off the debt. Founded by David Ricardo.

An investment theory that attempts to maximize portfolio expected return for a given amount of portfolio risk, or equivalently minimize risk for a given level of expected return, by carefully choosing the proportions of various assets. Founded by Harry Markowitz.

An economic theory that describes the separation of the yield curve into several segments, where the interest rates for each segment are determined by the supply and demand for funds within that segment. It challenges the notion of a single yield curve.

A theory that suggests that business cycle fluctuations can to a large extent be accounted for by real (in contrast to nominal) shocks. Founded by Finn Kydland and Edward C. Prescott.

An economic theory suggesting that pay of employed workers tends to have a slow response to the changes in the performance of a company or the economy. This can lead to disequilibrium and unemployment. Based on Keynesian economics.