School of Thought

Overview of Macroeconomic Thought

  • Introduction to Macro Economics

    • Examination of strengths and weaknesses of standard macroeconomic thought

    • Recognition of the existence of mainstream economics and alternative approaches.

Limitations of Mainstream Economic Thought

  • Planetary Boundaries

    • Insufficient exploration of environmental damage and pollution reduction.

    • Acknowledgment that current economic practices are not adequate.

  • Inequalities and Stratification

    • Focus on Gross Domestic Product (GDP) emphasizes size and growth of economies.

    • Lack of investigation into wealth distribution and the beneficiaries of economic growth.

  • Power Dynamics

    • Absence of power analysis in trade and market behavior discussions.

    • Importance of recognizing that prevalent economic thought often reflects Global North perspectives.

    • Urging students to explore knowledge from Global South scholars for broader understanding.

Call to Action for Students

  • Importance of Critical Thinking

    • Encouragement to not limit understanding to mainstream perspectives.

  • Emphasis on Practical Understanding

    • Learning models and equations should translate to real-world understanding rather than be mere intellectual exercises.

Alternative Economic Theories

  • Understanding Mainstream Economics

    • Legacy of neoclassical marginalist economics; exclusion of key aspects from analyses.

  • Critique of Rational Economic Actors

    • The narrow focus on egoistic behavior in economic models.

    • Need to incorporate bounded rationality into economic understanding.

Behavioral Economics

  • Nature and Scope

    • Addresses criticisms of traditional economics by studying actual human decision-making.

    • Collaboration between economists and other social scientists (sociologists, psychologists, etc.) to investigate behavior.

    • Application of behavioral insights to develop sustainable consumer and investment practices.

Institutional Economics

  • Concept of Embedded Economy

    • Economics should prioritize societal well-being and embeddedness of economic activities.

    • Financial systems exist to serve human needs—should not prioritize economic indicators over societal welfare.

  • Great Transformation by Karl Polanyi

    • Highlighting the essence of economy as a mechanism to sustain society rather than merely grow GDP.

Feminist Economics

  • Definition and Importance

    • Methodology that highlights economic realities affecting different genders differently.

    • Critique of valuing only market-generated labor and emphasizing the role of unpaid labor, particularly women’s work.

  • Unpaid Labor as a Key Aspect

    • Discussion of how reproductive labor supports market value creation.

    • Examples of unpaid work contributing to an economy's functioning (e.g., domestic tasks enabling labor market participation).

Knowledge Production and Diversity

  • Acknowledgement of Diverse Perspectives

    • Value of insights and knowledge from less dominant social and cultural positions.

Final Exam Preparation

  • Review of Expectations

    • Final exam will incorporate midterm material; students should review their midterms for preparation.

    • Instructions for calculating GDP using three different methods.

  • GDP Calculation Methodology

    • Reminder that GDP values should be consistent across all methods used.

    • Example of GDP calculation:

    • Economy with two parts: cotton producer and cloth company.

    • Total revenue from final product: $40.

    • Importance of correctly calculating added value by considering inputs.

  • Recommendations for Students

    • Encourage collaboration and questions among classmates for better understanding.