Economic Theories


Theories accurately describe why specific results have been achieved in the past; and why, given the same circumstances, the same result will occur in the future.


We tend to underestimate the importance of theory in most of the activities in our lives. The overlooked importance of theory has a particular importance in economics. Economists frequently confuse correlation with causation. By not testing observations with sound theory they frequently recommend actions detrimental to their desired results.

Value Theory

... economic value is not an inherent property of a good, but determined by the preferences of those who wish to acquire the good.

Praxeology

The word praxeology refers to the systematic study of purposeful human action. Praxeology provided a foundational concept in the theories developed by Ludwig von Mises.

Economic Activity

Purposeful activity resulting from human action.

Exchange

The fundamental activity of markets consist of exchange. Therefore, studying exchange theory provides a basis for understanding all economic theory.

Reasoning
Guiding Ideas