Economic approaches and socio-economics
- What should economics focus on?
- What can different approaches contribute?
- Why socio-economics?
Mainstream Economics
- neoclassical economics
- scarcity
- trade-offs
- marginal thinking
- incentives
- mathematical models
- abstraction
- assumptions
- relationships
- postivist view
- positive statements
- can be tested, confirmed
- read off “reality” from empirical facts
Advantages:
- rigorous and transparent language
- results and benchmarks
- check, wether knowledge claims are logically consistent
- identify assumptions necessary to obtain a particular outcome
But:
- based on a particular theory of science, logical positivism
- other approaches:
- critical realism
- hermeneutics
- often less focus on
- falsification
- status of empirical facts
- importance on “positionality” of researcher
How to make sense of reality?
wontfix get from slides
Theoretical lenses
wontfix get from slides
Socioeconomics
- Multi-Disciplinary and Multi-Perspective thinking
- The economy is not an independent entity separate from society
- all decisions have political and moral results
- actors do not have a level playing field
- markets without regulations and institutions would destruct society
- economic explanations cannot be reduced to single individuals
Trade and Growth
Correlational Effect clearly present Prebish-Singer Hypothesis Causal effect of trade and growth → Instrumental Variable Estimation Stolper-Samuelson Theorem
Environmental Depletion
- more trade requires more depletion for transportation
- as countries grow richer they tend to get less polluting
- empirical data for both sides is present
- neither direction is proven/can be proven currently
- pollution haven
- pollution without large fees
- not enough empirical data to see if that happens
- companies which offshore product seem to be cleaner than domestic producers