Posted on

Evaluate the institutionalist economists. Determine which economist you feel made the most significant contribution to economic theory Answer

The Institutionalist School.” Please respond to the following:

  • Evaluate the institutionalist economists. Determine which economist you feel made the most significant contribution to economic theory. Justify your selection.
  • Compare and contrast the principles of the institutionalist school to neoclassicism. What tenets of neoclassicism do you think institutionalist economists would reject? Defend your selection.

Evaluate the institutionalist economists. Determine which economist you feel made the most significant contribution to economic theory. Justify your selection.

Ans: Douglas North is noted for his work on how institutions create constraints on economic decisions. He along with Ronald Coase got Nobel Prizes for examining the implications of institutional constrains and flaws in our system of property rights that give rise to numerous inefficient solutions in the market place. Single most important characteristic of institutionalism is the idea that the inidvidual is socially and institutionally constituted. The idea that individual tastes are not given, but are shaped by institutional circumstances and by particular influences such as advertising, is a major theme in the writings of Galbraith. More generally, institutionalists recognize the potential influence of many institutions on individual habits, conceptions, and preferences.

References:

Hodgson, G.M. (2000). What Is the Essence of Institutional Economics? JOURML 0F ECONOMIC ISSUES. Vol. XXXIV. June 2000

Compare and contrast the principles of the institutionalist school to neoclassicism. What tenets of neoclassicism do you think institutionalist economists would reject? Defend your selection.

Ans: Principles of the institutionalist does not assume a given individual, with given purposes or preference functions. Instead of a bedrock of given individuals, presumed by the neoclassicists and new institutional economics, the old institutionalism holds to the idea of interactive and partially malleable agents. The great merit of the institutionalist idea that institutions shape individual behavior is that it admits an enhanced concept of power into economic analysis. Neo-classical economics neglects the influence exercised over conduct by the scheme of institutions.

References:

Hodgson, G.M. (2000). What Is the Essence of Institutional Economics? JOURML 0F ECONOMIC ISSUES. Vol. XXXIV. June 2000

  • Evaluate the institutionalist economists. Determine which economist you feel made the most significant contribution to economic theory. Justify your selection.

Institutional economic focus on accepting the responsibility of the evolutionary process and the function of institutions in shaping economic performance. The original institutional economic is an attempt to incorporate a theory of institutions into economic.

  • Compare and contrast the principles of the institutionalist school to neoclassicism. What tenets of neoclassicism do you think institutionalist economists would reject? Defend your selection.

There are various political approaches for kind why the environment economic difference exist. With the rise of environment awareness in the 1970’s the main schools of thought within political economy revisited their theorizations. The Neoclassical, Institutional and Marxist schools of thought have adjusted their theories to account for the environment in various ways. Contract and compare to many attempts and replace neo-classical theory.

 

Evaluate the institutionalist economists. Determine which economist you feel made the most significant contribution to economic theory. Justify your selection.

Institutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behavour .The new institutional economics is an attempt to incorporate a theory of institutions into economics. However in contrast to the many earlier attempts to overturn or replace neo-classical theory, the new institutional economics builds on, modifies, and extends neoclassical theory to permit it to come to grips and deal with an entire range of issues. Ken Thorstein Veblen’ made the most significant contribution to economic theory.Thorstein Veblen’s instinct-oriented dichotomy between technology on the one side and the “ceremonial” sphere of society on the other.

Compare and contrast the principles of the institutionalist school to neoclassicism. What tenets of neoclassicism do you think institutionalist economists would reject? Defend your selection.

Institutional economics focuses on “the arrangements which determine the nature of our economic system”and in this respect follows Adam Smith who made political economy the study of “the relationship of economic organization to National wealth” The Organization and performance of the economy, and distribution of benefits and costs to individuals, is thus determined by a human made institutional order composed of “ changeable elements of life” which through collective action and control can be engineered “in such a way to satisfy our needs and whims.

Leave a Reply

Your email address will not be published. Required fields are marked *