Three strands of heterodox economics that are leading the way…
Complexity, evolutionary and behavioural economics
Various schools of economic thought outside the neoclassical mainstream are often placed together under the banner heading of ‘heterodox economics’. This term is used to describe any innovative way of thinking about the economy, from those that represent complete breaks from the neoclassical approach to others seeking to undermine only some of its main ideas.
In this piece, three strands of heterodox economics are discussed in some detail: complexity, evolutionary and behavioural economics. Each offers different insights into economic analysis by seeking a more accurate representation of the economy, and in so doing opens up new possibilities for policymakers. This essay summarises their basic tenets – and discusses what they might mean for public policy.…Useful summary. The new thinking in economics is making an effort to connect theory with reality after neoclassical economics prioritized theory over reality to the degree that economists lost contact with reality by caging themselves in formalism.