The Economic Approach

Alfred Endres and Volker Radke
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Alfred Endres: University of Hagen
Volker Radke: State University Ravensburg

Chapter 3 in Economics for Environmental Studies, 2018, pp 21-36 from Springer

Abstract: Abstract The economic principle is presented as the strategy best suited to deal with the problem of scarcity. Acting in accordance with this principle yields efficient results, such that there is no waste of resources. Consumers and firms are assumed to be agents who act economically. The structure of interaction between consumers and firms is outlined as a circular flow. A positive, i.e., merely observing and describing, analysis of this interactive structure is distinguished from a normative one, which evaluates the outcomes of interaction according to the criteria of efficiency, justice, and stability. (Efficiency is in the centre of mainstream economic analysis. This is so because the impetus for acting efficiently follows directly from the fundamental economic problem of scarcity. Therefore, this criterion receives particular attention in our discussion.) From any violation of these criteria, a justification of governmental action may be deduced. As two fields of governmental action, the choice of economic system and interventions in the economic process are discussed.

Date: 2018
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DOI: 10.1007/978-3-662-54828-8_3

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