What are the 4 economic theories?

The 4 economic theories are supply side economics, new classical economics, monetarism and Keynesian economics. New-classical economists believe that, to develop, countries must liberate their markets, reform labour markets, privatise state owned industries, encourage entrepreneurship (risk taking). You can read about the Demand and Supply – Concepts of Economy for UPSC in the given link.

Monetarism emphasizes the role of governments in controlling the amount of money in circulation. Keynes advocated for increased government expenditures and lower taxes. Supply-side economics postulates economic growth can be most effectively fostered by allowing free trade, decreasing regulation, and lowering taxes.

Further readings:

  1. Commission for Agricultural Costs and Prices (CACP) – UPSC Notes
  2. Monetary System – Types of Monetary System (Commodity, Commodity-Based, Fiat Money)

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