Do Macroeconomic Models Need Reconstruction? A Methodological Analysis of the Relationship between Macroeconomics and Behavioral Economics

Document Type : a

Authors

1 دانشیار دانشکدة مدیریت و اقتصاد، دانشگاه تربیت مدرس

2 دانشجوی دکتری علوم اقتصادی، دانشگاه امام صادق علیه‌السلام

3 دانشجوی دکتری علوم اقتصادی، دانشگاه امام صادق علیه السلام

Abstract

In macroeconomic models, the relations between macroeconomic variables are studied based on specific explanations. In ‘Behavioral Economics’, the focus is on the behavior of economic agents, and the researchers' goal of studying in this area is to achieve theories with greater predictive power. In this paper, we will seek to understand how these two domains of economics are related together. Our other objective is to understand how macroeconomics needs to use behavioral economics, with an emphasis on some considerations of the methodology of economics. This study is a descriptive survey referring existing studies in macroeconomics and behavioral economics. While we present a new approach to people familiar with traditional macroeconomics, examine the impact of behavioral economics studies on some important issues in macroeconomics. According to the findings of this study, in macroeconomic models, due to factors such as ‘better explanation of variables and higher predictive power’, ‘the need for research method flexibility’, and ‘the effect of unconventional behaviors on macroeconomic outcomes’, more attention should be paid to studies of behavioral economics. Of course, this does not mean mitigating the role of conventional macroeconomic models.

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References

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Journal of Iranian Economic Issues
Volume 3, Issue 1
April 2017
Pages 105-127

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History

  • Receive Date: 01 June 2016
  • Revise Date: 17 June 2016
  • Accept Date: 05 July 2016

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