The term economics was coined around 1870 and popularized by Alfred Marshall, as a substitute for the earlier term political economy which has been used through the 18-19th centuries, with Adam Smith, David Ricardo and Karl Marx as its main thinkers and which today is frequently referred to as the “classical” economic theory. Both economy and economics are derived from the Greek oikos- for “house” or “settlement”, and nomos for “laws” or “norms”.

Economic thought may be roughly divided into three phases: Premodern (Greek, Roman, Arab), Early modern (mercantilist, physiocrats) and Modern (since Adam Smith in the late 18th century). Systematic economic theory has been developed mainly since the birth of the modern era.