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The first writers to treat economics systematically — Adam Smith and his immediate successors — dealt with the economy as a whole. In today’s terminology they were concerned with macroeconomics. Later economists, notably Alfred Marshall and his followers in the Neo-classical school, focused upon the household and the firm. They inaugurated the era of microeconomics which led to Chamberlin’s theory of monopolistic competition and Mrs. Robinson’s theory of imperfect competition. The Neo-classical economists and their successors analyzed the forces which result in economic equilibrium, but their approach was that of partial equilibrium, or the method of examining "one thing at a time." During the 1930s, under the influence of John Maynard Keynes, there was a revival of interest in aggregative economics. Keynesians drew on the work of both Classical and Neo-classical schools. Like the latter, they were concerned with the forces which result in equilibrium or disequilibrium, but they returned to the Classical tradition in their emphasis on the economy as a whole. The Neo-classical economists had devoted much of their attention to the theory of value - examination of the forces which determine prices under given market conditions. The Keynesians, however, were primarily concerned with the determinants of income and employment. Their system was based on broad aggregates: total employment, total consumption, total investment, and national income. Keynesian economists showed how these variables are related to one another, and how changes in one affect the rest. They were much less interested than the Neoclassical economists in examining the effects of a change in one variable on the assumption that all others remained fixed. In this sense the Keynesians were concerned with general rather than partial equilibrium. But neither the Neo-classical economists nor the Keynesians were directly concerned with economic interdependence, with the structure of the economy and the way in which its individual sectors fit together.
Regional Research Institute, West Virginia University
input-output analysis, econometrics, matrix algebra, mathematics
Miernyk, William H., "The Elements of Input-Output Analysis" (2020). Web Book of Regional Science. 6.