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Different schools of Economic thought

Tom White

22nd September 2014

Hopefully Economics keeps moving forwards, with new ideas enriching the subject in schools and universities. You may be aware that there is a 'post-crash economics' debate out there, with people wondering how economists got things so wrong in the lead up to the crash.

I was lost for words when I met Cambridge economist Ha-Joon Chang recently. Partly I was a bit star struck, but mainly it was because I was so impressed by his plea: can't we draw on more sources of inspiration than the neo-classical school of economics which has come to dominate the subject?

I don't want to describe all these schools of economics now (I summarised an article on Minsky a while ago however). And you will have heard about Karl Marx (and if you haven't, you should). Few people will get to the end of their economics course without coming across Keynes, and you may even know a bit about Hayek (and even seen them fight it out in a rap battle). My students will be doing a bit of behavioural economics soon. They will also come across some ideas from the Developmentalist and Institutionalist traditions when we look at development economics.

The purpose of my blog is to encourage you to explore some of these rival worldviews, which Ha-Joon does very effectively in his book Economics: The User's Guide. It's a terrific way for top flight candidates to draw out high level evaluation marks, by arguing that different approaches in economics might recommend different solutions to problems, for instance.

It's also worth noting that traditional 'A' level Economics allows scope to look more widely across the subject than is possible on many degree courses! Students shouldn't be put off studying Economics at degree level because they are told “it's all maths" and dominated by abstract theorising that many 'A' level candidates find a turn-off after the excitement of their introduction to the subject. Be on the lookout for alternative views when you make your applications.

I've copied out a summary of these different views from Economics: The Users' Guide: Comparing_different_schools_of_Economics.docx. The shaded boxes have been added by me to show my students which bits they are likely to encounter on their course.

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