The Economic View

The Economic View

Copyright: © 2015 |Pages: 18
DOI: 10.4018/978-1-4666-6469-2.ch001
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Economics is the social science that analyzes the production, distribution, and consumption of goods and services. In one of its most recognized academic definitions, it is known as “a science that studies human behavior as a relationship between ends and scarce means which have alternative uses” (Robbins, 1932). The main tools of the economists are theories and models. Economic models are theoretical constructs that represent economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified framework designed to illustrate complex processes, often but not always using mathematical techniques. This chapter is structured in order to present some of the main theories and models developed by economists dealing with the enterprise addressing its existence, structure, behavior, and relationship to the market. Its purpose is to highlight the main aspects economists research in order to understand how the enterprise emerges, organizes, and governs itself and grows.
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2. Background

The modern economy is a complex system. As economies allocate goods and services, they emit measurable signals that suggest there is order driving the complexity. For example, productivity and R&D (research and development) across enterprises seem to be positively related, whereas productivity growth seems not to be strongly related to enterprise R&D. Patents and R&D also seem to be positively related both across enterprises at a point in time and across time for given enterprises.

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