How does politics affect economic outcomes? This question has been asked probably as long as people have been interested in economics itself. Ž From Adam Smith’s Wealth of Nations in 1776 or perhaps the Physiocrats . even earlier until at least John Stuart Mill’s Principles of Political Economy in 1848, what we now call ‘‘economics’’ was in fact generally referred to as ‘‘political economy.’’ T...

This entertaining book takes up the theme that psychology matters for economics. Akerlof and Shiller introduce this idea in the guise of 'animal spirits' that they define to mean five things: (1) confidence (beliefs about what will happen can independently influence outcomes); (2) fairness (wage setting depends on concerns for what others receive); (3) antisocial behavior (some bankers are crim...

In this essay I intend to briefly summarize the essential characteristics of the new institutional economics, to describe how it differs from neo-classical theory, and then to apply its analytical framework (as I see it) to problems of development. I The new institutional economics is an attempt to incorporate a theory of institutions into economics.1 However in contrast to the many earlier att...

The relationship between economics and history has always been uneasy not least since the marginalist revolution of the 1870s laid down the foundations for contemporary mainstream economics. The tension between the two disciplines is not difficult to understand. Quite apart from differences in style and research methods which divide all disciplines, the dull concern of the dismal science with p...

The history of the study of judgment and decision making has been marked by an iterative tension between what are known as prescriptive and descriptive advances. Prescriptive theories, which typically have their roots in economics, seek to define efficient or optimal decision making. Descriptive empirical advances, with roots typically in psychology, then invariably suggest that these prescript...

A fair number of social scientists, several journals such as the Journal of Economy and Philosophy, the Journal of Behavioral Economics, and the Journal of Economic Psychology, a new section of the American Economics Association, and several symposia (such as the one published by the Journal ofBusiness in 1086) are attempting to develop a new paradigm tha t will expand the range of sociological...

Recent discoveries in behavioral economics have led scholars to question the underpinnings of neoclassical economics. We use insights gained from one of the most influential lines of behavioral research—gift exchange—in an attempt to maximize worker effort in two quite distinct tasks: data entry for a university library and door-to-door fundraising for a research center. In support of the recei...

Using illustrations from research on inequality, this paper offers evidence the strengths of ‘behavioural synthesis’, i.e. reconciliation between neoclassical and behavioural economics. We compare how theoretical models absolute relative inequality have evolved assumptions income maximization to status-seeking competition, altruism. emphasize relevance experiments in testing competing theories ...

Progressives the world over cherish high hopes in development of institutions for collective actions. Among these institutions, commons have a long history western Europe. While new institutional economics emerged 1960s, were not taken seriously postwar before seminal work Elinor Ostrom late 1980s. How can we explain this belated integration economics? In paper, trace some origins neoclassical ...

This paper attempts to assess the recent literature on feminist economics from the perspective of modern Austrian economics. Feminists and Austrians share many epistemological and methodological criticisms of neoclassical theory, although Austrians have never linked those criticisms to gender. Both groups argue that the attempt to mimic the methods of the natural sciences has been a particular ...