Xiaokai Yang created the super marginal analysis method and revived the important thought of division of labour of Adam Smith.
When the corner solution appears, the marginal substitution rate of consumers is not equal to the price ratio of each consumption level in all cases.
The school argues that a market economy can automatically solve problems such as unemployment and recession, while government-led stabilization policies have no effect.
This differs from monetarism, as the dilemma between unemployment and inflation does not exist only in the long and short run.
The difference with previous dynamic models is that people's knowledge of the division of labor and organization increases gradually with the passage of time.
From the perspective of the evolution of new classical economics, the emergence of government creates new professional and division of labor structures.
The second step is to use the "marginal analysis" method to solve the remaining combinations (corner point solution) and obtain each local optimal value.
[6] In the modern era of rapid development of network business, using ultra-marginal framework to analyze the development of e-commerce and related phenomena, such as bundling, is a very effective analysis method to improve sales performance and reduce marginal cost.
If the transaction efficiency is very low, the positive network effect of the specialized economy or market is to offset the transaction cost, so the self-sufficiency or low level of division of labor, which is with a small network market, is effective and will choose the invisible hand.
If transaction efficiency is improved, the level of division of labor and the scale of relevant market network will increase.
More specifically, it means that before people make the decision of resource allocation, they should first choose specialty and division of labor.
However, the core problem of classical economics research represented by Adam Smith is how to overcome the limitation of resource scarcity and increase the supply of scarce resources, that is, how to change the division of labor and evolution of production probability curve.
Stiglitz's theoretical innovation lies in: first, the expression of macroeconomics is directly laid on the solid foundation of microeconomics, so as to surpass samuelson's economics.
[11] The analysis of bipolar world theory points out that neoclassical economics, like neoliberalism, belongs to the economic theories of the capitalist world system in the period of external expansion, which are generated under the general background of insufficient international effective demand.