What Is Mainstream Economics?

Mainstream economics is a term used to describe schools of economic thought considered to be orthodox. Many of the underpinning models and beliefs of mainstream economics are based on concepts that involve economic scarcity, the role of governmental regulation or other action that affects an actor's decision, the concept of utility, and 🦹the idea that people are rational actors who will make decisions that are based purely on available information and not emotion.

Understanding Mainstream Economics

Mainstream economics is not a branch of economics itself, but is used to describe theories often considered part of the 澳洲幸运5官方开奖结果体彩网:neoclassical economics tradition.

Mainstream economics follows 澳洲幸运5官方开奖结果体彩网:rational choice theory, which assumes that individuals make decisions that will maximize their own utility, and usꦐes statistics and mathematical models to demonstrate theories and evaluate various economic developments. Many of the underlying categories and concepts central to mainstream economics are readily taught at universities.

Criticism of Mainstream Economics

Mainstream economics, the study of rational actors in a world of trade-offs, has faced several challenges. Schools of economic thought outside of mainstream economics—called 澳洲幸运5官方开奖结果体彩网:heterodox economics—are more ཧskeptical of the role of the government and the rationality 𝔉of actors.

The main criticism of mainstream economics is the absence of considerations relating to external factors. For example, this type of economic thought assumes the complete rationality of actors. It assumes that individuals are selfish and will always act in their own best interesꦜts. There is no place for moral concerns or altruism in mainstreꦕam economics and the invisible hand is expected to move markets without fear or favor.

But recent economic theorists have become open to the thought that people are not entirely rational. In fact, an entirely new field of study, known as 澳洲幸运5官方开奖结果体彩网:behavioral economics, has emerged for this discipline. Markets are also not entirely efficient, and factors that affect an actor's decision are not always quantifiable. These beliefs seem to have become more commonplace since 澳洲幸运5官方开奖结果体彩网:the Great Recession.

Mainstream economics also does not focus on economic concerns gaining momentum, such as sustainability and pollution. Again, 澳洲幸运5官方开奖结果体彩网:environmental economics is a separate field that studies incentives and policymaking specifically geared toward promo🌜ting sustaina♉ble practices and businesses.

Example of Mainstream Economics

Early theories relating to the development of economics as a field of study are part of m♍ainstream economics.

For example, the 澳洲幸运5官方开奖结果体彩网:invisible hand theory that is responsible for moving markets is part of mainstream economics. In this theory, individual self-int🐷erest and freedom to produce and consume are supposed☂ to collectively maximize the common good.

Governments have little to no 🐬role to play in this theory, except for ensuring that the rule of law is followed. However, recent events, especially those relating to the Great Recession, have proved that the common good is not always the end result of individuals pursuing profits.