This volume, part of a series of monographs that explores the relationship between the economy and schooling, is intended to show how economists have sought to cast light on the economic nature of education, on resource allocation problems within the education sector, and on policy implications of such analyses. The first part describes the basic schools of thought in economics: the neo-classical school, the Keynesian school, the institutional school, the political economy school, and the Marxist school. The second part is an introduction to the basic economic concepts of production, exchange, and distribution. Remaining sections describe changes in economic and educational climates since the Second World War, human capital theory, the changing concern from macroeconomic to microeconomic issues in education, input-output relationships, recent developments in the economics of schooling, the influence of policy making on the economics of schooling, and future directions of the economics of schooling in Australia. An afterword provides reflections on evolutionary dynamics of ideas about the economics of schooling. Three readings by separate authors follow: (1) "Economics against Education," by J. Burkhead; (2) "Educational Production Theory and Teacher Inputs," by H. M. Levin; and (3) "Toward a Multilevel Perspective on the Allocation of Educational Resources," by D. H. Monk. An annotated bibliography follows. (TE)