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the definition of economics [2] the scope of economics as defined by its methods [3] fundamental principles and operational significance of economic theory [4] methodological individualism versus holism in economics [5] the role of simplifying assumptions such as rational choice and profit maximizing in explaining or predicting phenomena [6]
An economic model is a theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified, often mathematical, framework designed to illustrate complex processes.
Independence of irrelevant alternatives (IIA) is an axiom of decision theory which codifies the intuition that a choice between and should not depend on the quality of a third, unrelated outcome . There are several different variations of this axiom, which are generally equivalent under mild conditions.
Econometrics is an application of statistical methods to economic data in order to give empirical content to economic relationships. [1] More precisely, it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference."
Market design; Economic theory of museums; Mutualism (economic theory) N. ... Relative income hypothesis; Rent-gap theory; S. Shale band; Social gravity; Social ...
The adaptive market hypothesis, as proposed by Andrew Lo, [1] is an attempt to reconcile economic theories based on the efficient market hypothesis (which implies that markets are efficient) with behavioral economics, by applying the principles of evolution to financial interactions: competition, adaptation, and natural selection. [2]
Robert Hall was the first to derive the effects of rational expectations for consumption. His theory states that if Milton Friedman’s permanent income hypothesis is correct, which in short says current income should be viewed as the sum of permanent income and transitory income and that consumption depends primarily on permanent income, and if consumers have rational expectations, then any ...
However, the Walrasian general equilibrium theory presents another trend to the synthesis as it attempts to theorise the economy as a whole and is viewed as an alternative to macroeconomics. This approach is considered to be the trigger for exploring microfoundations, [ 1 ] however, the notion of a gap in the "micro-macro" link has been and ...