B is for Bias

2014 ◽  
Vol 3 (2) ◽  
pp. 35-47
Author(s):  
Calin Valsan
Keyword(s):  
Economic Theory ◽  
Rational Expectations ◽  
Economic Environment ◽  
Rational Agents ◽  
Economic Agents ◽  
Behavioral Biases ◽  
The Social ◽  
Modern Economic

Standard economic theory assumes rational agents. Individuals are expected to have rational expectations and constantly optimize their choices. Modern economic and financial theory is build under the assumption of rationality. There is plenty of evidence from psychology, however, that individuals are biased and rely heavily on heuristics in order to make decisions. Yet, this is not a mere fluke, a behavioral oddity. Because the social and economic environment in which individuals evolve is complex, behavioral biases represent evolutionary adaptations allowing economic agents to deal with undecidability and computational irreducibility.

scholarly journals The Theory of Crisis after Crisis

2015 ◽  
Vol 52 (1) ◽  
pp. 1-12
Author(s):  
Igor Mladenović ◽  
Dragoslav Kitanović
Keyword(s):  
Economic Theory ◽  
Economic System ◽  
Scientific Methodology ◽  
Objective Knowledge ◽  
World Crisis ◽  
Philosophy Of Economics ◽  
The Social ◽  
The World ◽  
Modern Economic ◽  
Political Foundations

AbstractThe global economic system and the world crisis are a reality, and hence the challenge for modern economic theory, which is to provide a valid response to its development and overcoming the crisis. The prevailing economic theory and methodology (neo-liberal paradigm) in this field demonstrates serious defects, so this paper attempts to show that the relative nature of economic theory is in expressing the social prejudices of its time. Demystification of the ideological and political foundations of what is today considered "objective knowledge" in the economy, is only possible with the affirmation of a new scientific methodology of economics, i.e. the new philosophy of economics. The aim of the paper is to stimulate thinking and different views on this subject.

scholarly journals Social Entrepreneurship: rethinking theoretical assumptions

2021 ◽  
Vol 17 (2) ◽  
Author(s):  
Monika Golonka ◽  
Anna Rychlik
Keyword(s):  
Economic Theory ◽  
Social Entrepreneurship ◽  
Social Entrepreneur ◽  
Human Beings ◽  
Essential Nature ◽  
The Social ◽  
Theoretical Assumptions ◽  
Modern Economic ◽  
Theoretical Paper ◽  
Realist View

Most of the Social Entrepreneurship (SE) literature derives its theoretical assumptions from the field of entrepreneurship in general, and more broadly, from modern economic theory. However, some thinkers notice significant gaps in existing theory and try to conceptualise SE incorporating some missing elements. In this theoretical paper, we explain the origins of contemporary SE concepts, analyse the significant contemporary SE works of leading thinkers and their theoretical assumptions. We also specify major shortcomings in existing concepts and demonstrate the possibility of filling gaps by realism, especially Aristotle’s philosophy. His distinctive realist view of human beings, including entrepreneurs, and his broader view on economics allows us to understand the essential nature of entrepreneurship, providing unique insights regarding the intellectual-volitional faculties of the social entrepreneur.

Economics With a Human Face?

2011 ◽  
Author(s):  
Francesco Boldizzoni
Keyword(s):  
Economic Theory ◽  
Social Science ◽  
Alternative Interpretation ◽  
Neoclassical Economics ◽  
Human Face ◽  
Karl Polanyi ◽  
Science History ◽  
Social Science History ◽  
The Social ◽  
Modern Economic

The major misunderstanding about cliometrics comes from the subsequent spread of Douglass North's new institutional approach. North claims to have challenged traditional economic theory, which he found inadequate. This chapter shows how this approach, besides being patently unhistorical, rests on flimsy foundations. In order to do so, it draws on a variety of evidence from the social and historical sciences. It also compares North's synthesis with the example of social science history offered by Moses Finley, the eminent ancient economic historian. Finley made a powerful argument against the application of modern economic theory to the past. Furthermore, he developed an alternative interpretation for the origin of institutions, rigorously demonstrating the logical precedence of society over the economy. The chapter begins by considering the criticism that Karl Polanyi made against neoclassical economics in the mid-twentieth century. In fact, both North's and Finley's works can be read as a response to Polanyi.

Epistemological aspects of self-organization processes in socio-economic systems from the standpoint of economic and mathematical modeling

2019 ◽  
Author(s):  
Михаил Куссый ◽  
Mihail Kussyy
Keyword(s):  
Mathematical Modeling ◽  
Economic Theory ◽  
Self Organization ◽  
Economic Systems ◽  
Anthropogenic Factor ◽  
Economic Agents ◽  
Existing Problems ◽  
Modern Economic

The monograph examines the processes of self-organization in socio-economic systems and some of their epistemological aspects from the standpoint of economic and mathematical modeling. The existing problems of modern economic theory, as well as approaches to modern research in economics, are investigated. It is shown that the key role in the processes of self-organization in socio-economic systems is played by the anthropogenic factor (namely, the expectations and preferences of economic agents). The main characteristics and mechanisms of self-organization processes in socio-economic systems, as well as the reasons that determine them, are investigated. The actual problems of mathematical modeling in economics are noted and solutions to some of these problems are proposed. It is recommended to researchers dealing with the problems of socio-economic systems behavior and its modeling.

scholarly journals On History of Mathematical Economics: Application of Fractional Calculus

Mathematics ◽  
2019 ◽  
Vol 7 (6) ◽  
pp. 509 ◽  
Author(s):  
Vasily Tarasov
Keyword(s):  
Economic Theory ◽  
Fractional Calculus ◽  
Deterministic Chaos ◽  
Present Moment ◽  
Mathematical Tool ◽  
Integral Calculus ◽  
Mathematical Economics ◽  
Economic Agents ◽  
History Of ◽  
Modern Economic

Modern economics was born in the Marginal revolution and the Keynesian revolution. These revolutions led to the emergence of fundamental concepts and methods in economic theory, which allow the use of differential and integral calculus to describe economic phenomena, effects, and processes. At the present moment the new revolution, which can be called “Memory revolution”, is actually taking place in modern economics. This revolution is intended to “cure amnesia” of modern economic theory, which is caused by the use of differential and integral operators of integer orders. In economics, the description of economic processes should take into account that the behavior of economic agents may depend on the history of previous changes in economy. The main mathematical tool designed to “cure amnesia” in economics is fractional calculus that is a theory of integrals, derivatives, sums, and differences of non-integer orders. This paper contains a brief review of the history of applications of fractional calculus in modern mathematical economics and economic theory. The first stage of the Memory Revolution in economics is associated with the works published in 1966 and 1980 by Clive W. J. Granger, who received the Nobel Memorial Prize in Economic Sciences in 2003. We divide the history of the application of fractional calculus in economics into the following five stages of development (approaches): ARFIMA; fractional Brownian motion; econophysics; deterministic chaos; mathematical economics. The modern stage (mathematical economics) of the Memory revolution is intended to include in the modern economic theory new economic concepts and notions that allow us to take into account the presence of memory in economic processes. The current stage actually absorbs the Granger approach based on ARFIMA models that used only the Granger–Joyeux–Hosking fractional differencing and integrating, which really are the well-known Grunwald–Letnikov fractional differences. The modern stage can also absorb other approaches by formulation of new economic notions, concepts, effects, phenomena, and principles. Some comments on possible future directions for development of the fractional mathematical economics are proposed.

Expectational Coordination Failures and Market Volatility

2013 ◽  
Author(s):  
Roger Guesnerie
Keyword(s):  
Economic Theory ◽  
Business Cycles ◽  
Rational Expectations ◽  
Critical Assessment ◽  
Informational Efficiency ◽  
Coordination Failures ◽  
Expectations Hypothesis ◽  
Real Business Cycles ◽  
Modern Economic ◽  
Modeling Principles

This chapter examines one line of criticism of the Rational Expectations Hypothesis (REH): expectational coordination failures. It begins by addressing the question of what went wrong with standard economic theory in general and with its modeling principles in particular and offers three answers relating to the diversification of modeling, the rationality hypothesis, and expectational coordination. It then considers the rise of REH in modern economic theory before discussing three avenues of criticism against REH: internal challenges, external criticisms, and criticism based on real-time learning. It also explains how a critical assessment of REH in different contexts changes the standard (REH-based) economic intuition, focusing on the question of the value of new financial instruments; the informational efficiency of the market; and the “good” expectational coordination that Real Business Cycles (RBC)-like models.

Die neue Welt der Ökonomie

1988 ◽  
Vol 10 (2) ◽  
Author(s):  
Gebhard Kirchgässner
Keyword(s):  
Social Sciences ◽  
Economic Theory ◽  
Economic Analysis ◽  
Economic Approach ◽  
Individual Behaviour ◽  
The Social ◽  
Modern Economic ◽  
Economic Imperialism

AbstractThe article starts out with a sketch of the model of Individual behaviour, basic for modern economic theory, including the consideration of typical criticisms. The model then is examined in its application first to micro- and macroeconomic theorizing, then to the economic analysis of politics and of law. It concludes by pointing out some drawbacks inherent in the economic approach to the social sciences: economic imperialism, conservativism and the illusion of manageability.

Corporate Governance as a System of Social Interactions: Informational-Analytical and Financial Aspect

2021 ◽  
Vol 39 (6) ◽  
Author(s):  
Nataliya Dyeyeva ◽  
Natalya Malyuga ◽  
Halyna Fyliuk ◽  
Oleg Grygor ◽  
Margaryta Skrypnyk ◽  
...  
Keyword(s):  
Economic Theory ◽  
Corporate Governance ◽  
Social Interactions ◽  
Theory And Practice ◽  
Global Models ◽  
The Social ◽  
Modern Economic ◽  
The Creation ◽  
Comparative Description ◽  
Financial Aspect

The issues of improving corporate governance as a social interactions system are a management task that is quite complex and urgent. The authors devoted their research to the problems of improving corporate governance as a system of social interactions. The authors studied legislative norms, analyzed the social essence of corporate governance, objective and subjective factors, gave a comparative description of the progressive global models of corporate governance, and the Ukrainian model. To formulate relevant proposals, the authors surveyed 174 respondents, to study whose interests, in their opinion, are primarily implemented in corporations. The generalization of the existing approaches of modern economic theory and practice to understanding and defining the essence of corporate governance made it possible to form a methodology of corporate governance as a system of social interactions, which was positively assessed by the respondents and which will strengthen trust in the company and contribute to the creation of value in the interests of shareholders, employees and other stakeholders, which will lead to an increase in its value of the company by increasing its competitiveness, efficiency and growth. However, in the study, possible obstacles arose, which will be studied in more detail in further investigations by the authors.

scholarly journals THE VIEWS OF THE LEADERS OF WESTERN ECONOMIC TEORY (for example, works of O. Blanchard, R. Barro, F. Kydland, D. Acemoglu)

2017 ◽  
Vol 9 (1) ◽  
pp. 90-174
Author(s):  
Alexander Khudokormov ◽  
N. . Alimova ◽  
A. . Baeva ◽  
A. . Izmaylov ◽  
A. . Litovchenko
Keyword(s):  
Economic Theory ◽  
Graduate Students ◽  
Rational Expectations ◽  
The West ◽  
Modern Economic ◽  
Liberal Concept

The presented set of articles is the result of the work of the master's seminar on modern economic theory of the West. They analyze the work of the most famous economists leading in the citation ratings: Olivier Blanchard, Robert Joseph Barro, Finn Kydland and Daron Asemoglu. Each of these authors represents one of the trends of modern economics. So, O. Blanchard is the representative of neoclassical and keynesian synthesis in macroeconomics. R. Barro and F. Kydland are developing a liberal concept of «rational expectations» D. Asemoglu heads modern neo-institutionalism. For students, graduate students and teachers who study modern economic theory.

The Symbiosis of Economic Science and Practice in Reforming (On the Book by S. Ya. Chernavsky “Reforms of the Energy Regulated Branches in Russia”)

2014 ◽  
pp. 114-124
Author(s):  
V. Makarov
Keyword(s):  
Mathematical Modeling ◽  
Economic Theory ◽  
Mathematical Models ◽  
Economic Science ◽  
Successful Implementation ◽  
Policy Recommendations ◽  
Economic Agents ◽  
Modern Economic ◽  
Econometrics Analysis

The book by S. Chernavsky is devoted to the reform of the Russian energy sector and the economy as a whole. The author assesses in detail carried out reforms and develops policy recommendations in the interest of the society. In some chapters of this book the author plays the role of an analyst, in the others - that of one of the participants directly involved in the reform or its main developer. In all cases, the analysis is combined with the use of modern economic theory, mathematical models of the behavior of economic agents and empirical data. Many mathematical models presented have been developed and evaluated in cooperation with the leading Russian experts in the field of mathematical modeling and econometrics analysis that determines their validity. The obtained results and policy recommendations allow us to count on lower transformation costs and higher probability of successful implementation of reforms.

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