After World War II, emphasis was placed on the analysis of economic growth and development. Western economists notable for their contributions to the economics of growth and development include Gunnar Myrdal of Sweden, Sir Arthur Lewis of Great Britain, and Joseph Schumpeter of the United States.
In recent years, economic theory has been broadly separated into two major fields: macroeconomics, which studies entire economic systems; and microeconomics, which observes the workings of the market on an individual or group within an economic system. The use of complex mathematical techniques and statistical data in economic forecasting has resulted in a new branch of economics known as econometrics. British economist Arthur Pigou was influential in the development of welfare economics, an important branch of the discipline that suggested that an economic system was better if even one person's satisfaction was increased while no one else's was decreased.
In the 1980s supply-side economics (which sees economic growth as essential for improving the material health of society) was used as a policy tool by the Reagan administration. Another modern economic school that was influential in the Reagan years is monetarism; monetarists, such as Milton Friedman, believe that the money supply exerts a dominant influence on the economy. In the 1990s, Nobel laureate Gary Becker extended the scope of macroeconomic analysis by applying economic reasoning to human behavior, including the use of sociology, anthropology, and other disciplines. Game theory has also been appied to economics (see games, theory of).
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.