How do people make decisions? There is a class of models in psychology which seek to answer this question but have received scant attention in economics despite some clear empirical successes. In a previous post I discussed one of these, Decision by Sampling, and this post will look at another: the so-called Fast and Frugal heuristics pioneered by the German psychologist Gerd Gigerenzer. Here the individual seeks out sufficient information to make a reasonable decision. They are ‘fast’ because they do not require massive computational effort to make a decision so can be done in seconds, and they are ‘frugal’ because they use as little information as possible to make the decision effectively.
The notion that the demand and supply side are independent is a key feature of textbook undergraduate economics and of modern macroeconomic models. Economic output is thought to be constrained by the productive capabilities of the economy - the ‘supply-side' - through technology, demographics and capital investment. In the short run a boost in demand may increase GDP and employment due to frictions such as sticky wages, but over the long-term successive rises in demand without corresponding improvements on the supply side can only create inflation as the economy reaches capacity. In this post I will explore the alternative idea of demand-led growth, where an increase in demand can translate into long-run supply side gains. This theory is most commonly associated with post-Keynesian economics, though it has been increasingly recognised in the mainstream literature.
Firms are the primary places where economic activity takes place in modern capitalist economies: they are where most stuff is produced; where many of us spend 40 hours a week; and where big decisions are made about how to allocate resources. Establishing how they work is hugely important because it helps us to understand patterns of production and consumption, including how firms will react to changes in economic conditions and policy. And a well-established literature – led by post-Keynesians and institutionalists – holds that the best way to determine how firms work is to…wait for it...ask firms how they work. This a clearly sensible proposition that is contested in economics for some reason, but we’ll ignore the controversy here and just explore the theory that springs from this approach.
Feminist economics is a key component of the movement for pluralism in economics and one that has, to some extent, been acknowledged by the mainstream of the profession. It seeks to highlight issues which affect women because (it claims) they have not traditionally been recognised in a field dominated by men. On top of this, it seeks to carve out a space for women in the discipline, both for intrinsic reasons of fairness and diversity and because it means that women’s issues are more likely to be highlighted going forward.
What influence do changes in tax policy or state decisions on expenditure have on economic growth? For decades, this question has been controversially debated.
In the history of the social sciences, few individuals have exerted as much influence as has Jeremy Bentham. His attempt to become “the Newton of morals” has left a marked impression upon the methodology and form of analysis that social sciences like economics and political science have chosen as modus operandi.
The general idea of a Job Guarantee (JG) is that the government offers employment to everybody ready, willing and able to work for a living wage in the last instance as an Employer of Last Resort. The concept tackles societal needs that are not satisfied by market forces and the systemic characteristic of unemployment in capitalist societies. Being a central part of the Modern Monetary Theory (MMT), attention for the JG concept rose in recent years.
In this video University of Warwick Economist Robert Akerlof provides an introduction to a new type of behavioral economics He explains how this type is being driven by a desire to understand how people are shaped by social interactions and what the economic consequences of this are He begins the …
Feminist economist Nancy Folbre presents a historical analysis of the interrelated development of Patriarchy and Capitalism. She describes the role of women in the reproduction of labour, their “specialization” in care and their changing involvement in the labour market. Folbre argues that capitalism weakens patriarchy but at the same time relies on unpaid caring activities.
The lectures were given by Steve Keen at the Exploring Economics Summer Academy 2017 in the workshop on Post Keynesian Economics The first lectures start with the role of money in a monetary economy and explain the macroeconomic significance of admitting the reality that banks create money The lectures continue …
Poster of the different schools of thought made by Sergio A. Berumen. From the Greeks to late 20th and beginning of the 21th century.
The article pursues the two related questions of how economists pretend to know and why they want to know at all. It is argued that both the economic form of knowledge and the motivation of knowing have undergone a fundamental change during the course of the 20th century. The knowledge of important contemporary economic textbooks has little in common with an objective, decidedly scientifically motivated knowledge. Rather, their contents and forms follow a productive end, aiming at the subjectivity of their readers.
This lecture by Prof. Dr. Eckhard Hein is part of the Introductory Lectures on Heterodox Economics at the 20th FMM Conference in 2016. It gives a good overview about where Post-Keynesian Economics can be located and what it is all about.
Anwar Shaikh seeks in his lectures for alternative explanations for empirically observed macro and microeconomic patterns of economic fluctuations price volatility and economic development In contrast to many other economic theorists he rejects micro foundations based on the idea of utility maximization and economic equilibria and develops a theory of …
This paper is a product of an online workshop held in Nigeria on the topic Unemployment: Policy Review and Recommendations. It explores the various unemployment policies introduced by the Nigerian Government and analysis how effective they are and suggests some practicable solutions to solving unemployment problems in the country. The workshop was organized by Rethinking Economics The Uploaders (RETU) as part of the project Solving the Major Economic Problem in Nigeria (SMEPN), an output of the Global Pluralist Economics Training (GPET). More details here: https://www.retheuploaders.org/programs/SMEPN
Stratification economics is defined as a systemic and empirically grounded approach to addressing intergroup inequality. Stratification economics integrates economics, sociology and social psychology to distinctively analyze inequality across groups that are socially differentiated, be it by race, ethnicity, gender, caste, sexuality, religion or any other social differentiation.
In this article, Perry Mehrling, a professor of economics at Barnard College, presents and discusses three theories of banking which are guiding bank regulation. These are credit creation theory, fractional reserve theory and debt intermediation theory.
In this short Video Silke Helfrich discusses the basics of commons. It’s an introduction into the essence of commons from a perspective stemming from outside the economic discipline that focuses on social practice. Her perception challenges the economic mainstream’s perception of common goods and goes beyond a purely materialistic conceptualisation of commons.
This is an online panel and discussion on the ongoing and potential gendered impacts of COVID-19 organized by the International Association of Feminist Economics (IAFFE).
After completing the module, participants should be able to have general overview on the theory of commons. They can differentiate between neoclassical, new institutional and social/critical commons theory and can use these theories to assess real life common-pool resource management and commoning pratices.
This course will fundamentally ask whether we can, or even should use the word ‘decolonising’ in our pursuit of a better economics?
This is a hands on four chapter course to learn how to better understand and act when faced with complex situations By the end of the course students will be able to take a story from the news describe what makes the situation complex and identify opportunities for effective action …
Marxist scholar David Harvey explains key concepts of capital from Marx. Applying Marx's analysis of capital to today's world, showing both the longevity and relevance of Marx's Capital, 150 years after its publication.
In this series of webinars, several researchers face different topics related to Degrowth. Money, health, Green New Deal, Anarchism, and many more.
In this essay, Professor Robert Pollin explores the short falls of the degrowth perspective in handling the impending environmental collapse as well as elaborates on the efficacies of a green new deal.
One hundred years ago the idea of 'the economy' didn't exist. Now, improving the economy has come to be seen as perhaps the most important task facing modern societies. Politics and policymaking are conducted in the language of economics and economic logic shapes how political issues are thought about and addressed.
This text provides an easy to understand introduction to complexity economics for non-specialist audiences such as bachelor's students.
Mainstream inflation theories in economics do little to explain the recent acceleration in price increases. The associated economic policy recommendations further increase the misery of low-income groups.
Neoclassical Economics imposed itself over the past decades as the core of mainstream economics, largely influencing academia and policy making.
Modern authors have identified a variety of striking economic patterns, most importantly those involving the distribution of incomes and profit rates. In recent times, the econophysics literature has demonstrated that bottom incomes follow an exponential distribution, top incomes follow a Pareto, profit rates display a tent-shaped distribution. This paper is concerned with the theory underlying various explanations of these phenomena. Traditional econophysics relies on energy-conserving “particle collision” models in which simulation is often used to derive a stationary distribution. Those in the Jaynesian tradition rely on entropy maximization, subject to certain constraints, to infer the final distribution. This paper argues that economic phenomena should be derived as results of explicit economic processes. For instance, the entry and exit process motivated by supply decisions of firms underlies the drift-diffusion form of wage, interest and profit rates arbitrage. These processes give rise to stationary distributions that turn out to be also entropy maximizing. In arbitrage approach, entropy maximization is a result. In the Jaynesian approaches, entropy maximization is the means.
Exploring Economics, an open-access e-learning platform, giving you the opportunity to discover & study a variety of economic theories, topics, and methods.