Classical economics is a school of thought that emerged in the late 18th century, emphasizing free markets, minimal government intervention, and the natural regulation of economic systems. Developed by influential economists like Adam Smith, David Ricardo, and John Stuart Mill, classical economics laid the foundation for many modern economic theories. The principles of this economic model continue to shape policies and economic structures worldwide.
Difference Between Classical Economics and Keynesian Economics | ||
Feature | Classical Economics | Keynesian Economics |
Role of Government | Minimal intervention | Active role in managing the economy |
Market Regulation | Self-regulating | Requires government policies |
Focus | Long-term growth | Short-term stability |
Demand vs. Supply | Supply-driven economy | Demand-driven economy |
Unemployment | Temporary and self-correcting | Requires government intervention |