Why is economics so fragile?

• Autor(a) principal: Caldas, José Castro
• Data de Publicação: 2011
• Outros Autores: Neves, Vítor, Reis, José
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10316/43190; https://doi.org/10.4000/regulation.9244
• topic: Crisis in economics; Economic crisis; Institutionalism; Political economy

The association between a crisis in economics and the economic crisis, spontaneously drawn by the media and the public, is a fact which calls for explanation. We begin by identifying what the public and the media perceive as “economics”. This is not economics in its plurality but a synthesis of new-Keynesian and new classical theory which emerged in the US during the 1980s. Such a synthesis is often presented as anchored in principles which establish the appropriate mode of economic reasoning. By reviewing what these principles state and what they conceal, we argue that this understanding of “Modern Economic Theory” leaves a number of traditions of economic thought out of economics or economic science which, although neglected and marginalized, still exist within economics departments. We then question whether the public and the media might be justified in attributing the blame for the economic crisis to the particular type of economics taken as representative of the profession and of academia. Finally we address the prospect of a (more) robust and prudent economics, which would have to be anchored in a solid understanding of institutions, institutional configurations, and their variety and dynamics.