What is the heterodox economy?
Heterodox economy includes methods and theories outside the mainstream economy. It is an umbrella term that connects different schools of economic thinking, many of which have only a small match with each other. One of the common critics, however, is that the neoclassical synthesis - a combination of previous economic theories - is inadvertently inaccurate. Another heterodox criticism is the methodology used by other economists. Many heterodox economists reject the theory of rational choice, the assumption that individual elections will reflect a rational decision.
The term heterodox combines hetero "different" and -Dox from orthodox. The heterodox economy literally means "different from the Orthodox economy". Heterodox economists disagree with one or more central tenants of the main economic thinking.
The mainstream economy, the economy adopted by most economists, is a combination of previous economic theories. The neoclassical economy focuses on the free market that will achieve efficiency onMisery and demand. The Keynesian economy, named after the British economist John Maynard Keynes, claims that a significant amount of government interventions is necessary for economic efficiency. The modern main economy is largely a combination of elements of these two theories.
A mixture of the neoclassical and Keynesian economy was described as neoclassical synthesis. Specifically, neoclassical theories are applied mainly to microeconomics, studying individual decisions in the economy. The Keynesian economy, on the other hand, is mostly applied to macroeconomics, the study of the economy as a whole. Many theorists at the Heterodox Economics School reject some or all neoclassical synthesis. He claims that he puts a restriction on a fuller understanding of economic activity.
Many heterodox economists criticize Methodology of Mainstream Economics. The point is the definition and scope of the economy itself. The economy is by its very nature difficultDraw a line because it is thus connected with other psychological and social phenomena. Another common subject of the heterodox economy is the boundary between experimental and theoretical approaches. In other words, economists disagree that the prerequisites of individual behavior can be made without first gathering supportive evidence.
In fact, the mainstream economy generally assumes that people will behave like rational agents. This means that they will tend to act in a way that maximizes their material condition and well -being. However, it is about how to define a term like "cool" and whether people actually act seemingly rational throughout. Some schools of heterodox economies question the assumption that people generally make rational decisions. Rather, the elections of people are often changed by limited information to make them act seemingly irrational.