THE PARADIGMATIC CRISIS AND THE “MAINSTREAM” POTENTIAL OF THE INSTITUTIONAL ECONOMICS
Journal Title: Globalization and Business - Year 2018, Vol 6, Issue 6
Abstract
The article analyzes the manifestations and causes of the paradigmatic crisis of the modern economic “mainstream”: the “monopolization” of economic theory and economic education by the neoclassical direction; Fragmentary nature of scientific research; The “fascination” of scientists with the problem of economic growth and ignoring other factors of social development. The emphasis is on the lack of interdisciplinary research, the “mathematization” of economic knowledge. It is noted that the role of mathematics in economic models is only instrumental, mathematically complex economic models make the world more incomprehensible than simplify, the connection with real life is lost. Unlike the «mainstream», technology and individual taste in the institutional economy are endogenous variables. Institutionalists focus on the boundaries in which the actual future can be predicted, in contrast to the prediction in the «model context»; Institutionalists approach the economy as an organic and evolving «whole», and not as a static mechanism; Other advantages of the institutional economy are: the use of methodological collectivism instead of methodological individualism; Study of the processes of adaptation and disequilibrium, a criticism of the «neoclassical search» for optimal and equilibrium solutions; Instead of technology, focus on ownership and transaction costs; Recognition of ideology as the determining factor in economic history, which contradicts the neoclassical vision of the world; The refutation of the Pareto optimality principle; Emphasis on economic and political power. The methodological orientation of the institutional economy and the possibility of practical application determine its potential for becoming a “new mainstream”.
Authors and Affiliations
INGA BALARJISHVILI
Keywords
Related Articles
- EP ID EP547613
- DOI -
- Views 80
- Downloads 0
DEVELOPMENT OF AGRI-FOOD TRADE BETWEEN POLAND AND GEORGIA IN TERMS OF DCFTA EU-GEORGIA
The EU signed the Association Agreements with Georgia on 27 June 2014. Substantial part of this Agreement, including the DCFTA sections are provisionally applied as of 1 September 2014. The agreements with Georgia have b...
THE ISSUE OF FORMING OPTIMAL ECONOMIC POLICY OF ENVIRONMENTAL PROTECTION
In the state the environmental policy faces three main issues, they are: The issue of internalization of external costs (i.e. the issue of transaction costs), informing issues and the issues of control. The issue of tra...
Evaluation of the Start-up Business Project
One of the most important factors of success is in the field of venture capital to select right investment project. Investors consider this process more precisely, because it is uncertain what project will have more chan...
Gender Issues and Characteristics of Israel Army
This article covers the characteristics of Israel Army and Gender issues related to it.Israel is the only country, that has obligatory army service for both, men and women. After fin-ishing school, from the age of 18, it...
EXPORT ISSUES IN ASSESSING COUNTRY’S COMPETITIVENESS
Often in scientific circles, mistrust regarding the reliability of competitiveness or other indices is expressed. The definite part of the economists think that it is not advisable to form any serious strategies based on...