Question

What is marshallian approach of economics?

Answer 1

His approch was→
We reformulate neoclassical consumer choice by focusing on lambda, the marginal utility of money. As the opportunity cost of current expenditure, lambda is approximated by the slope of the indirect utility function of the continuation. We argue that lambda can largely supplant the role of an arbitrary budget constraint in partial equilibrium analysis. The result is a better grounded, more flexible and more intuitive approach to consumer choice.

Answer 2

Marshallian economics attempted to walk a fine line between a formalist approach and a historically institutional approach. It is not surprising that in doing so it created critics on both sides. In the United States, a group called the institutionalists wanted simply to eliminate the theory, arguing that history and institutions should be emphasized and the inadequate theory dropped. Other critics, whom we will call formalists, went in the opposite direction: they believed that economics should be a science, not an engineering field, and that if economics were to conclude that the market worked well, we needed a theory to show how and why it did so. These formalists agreed with the institutionalists that Marshallian economic theory was inadequate, but their answer was not to eliminate the theory
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