Information Transfer Economics
Economics is changing, but in what direction?
Jason Smith
Tuesday, February 2, 2016
Jason Smith — Economics is changing, but in what direction?
Information Transfer Economics
Economics is changing, but in what direction?
Jason Smith
Subscribe to:
Post Comments (Atom)
4 comments:
This is pretty good:
"But if you first order theory fails in its first order tasks (within scope), you don't go constructing a second order theory from it. You really only have three choices: 1) reduce the scope of the existing theory, 2) try other first order theories or 3) go back to zero order."
There is no problem in the universe that cannot be solved with another epicycle.
The problem with conventional economics is with the framework (zero order). The framework determines the type of first order theories that are "possible" in the sense of permitted.
Conventional economics is admittedly based on two substantive assumptions and one methodological one.
The two substantive assumptions are maximization and general equilibrium (per Paul Krugman).
The methodological assumption is axiomatic-deductivist (formalistic). (Paul Samuelson was probably the most influential in this.)
As Paul Krugman has said, if you are not working within this framework, you are not in the game as far as "the economics profession" is concerned.
Heterodox = heresy. To be heterodox in economics is to exclude oneself from the game and severely constrain one's career opportunities.
I neglected another key methodological assumption that is part of the framework of conventional (orthodox) economics — microfoundations.
Post a Comment