THE QUEEN ASKED: STATE OF MAINSTREAM ECONOMICS

Hassan Syed () and Sema Yilmaz Genc ()
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Hassan Syed: BPP University UK, Islamic Finance Law
Sema Yilmaz Genc: Kocaeli University, Department of Marketing and Advertising

Economic Thought and Practice, 2019, vol. 28, issue 2, 681-697

Abstract: The neoclassical economics owes its development to Alfred Marshall and Leon Walras in the late 19th century. Marshall is also attributed with the partial equilibrium theory. Walras is known for his general equilibrium theory. Both Marshall and Walras are also attributed with the introduction of mathematics in their explanations of economic phenomenon. Since their time mathematical economics has reached new heights. Marshall, a British economist relied on the Ceteris paribus assumption principle. Walras, a French mathematician used laissez-faire as his assumption principle. Neoclassical economics saw major changes post the Great Depression. The 1929 Great Depression changed the economic views of John Maynard Keynes who was the ardent fan and star pupil of Marshall. Over time, the rational behaviour of agents and value proposition helped change the various proposed models in mainstream economics. The 2008 global financial crisis jolted the sensibilities of the entire world. Since the last decade trillions of dollars have been pumped into the global financial systems to ensure that the mega-financial institutions do not fail. Several Nobel Laureates in Economics including other prominent economists have questioned the mainstream academia’s ethical position and their inability to predict the 2008 financial crisis. Her Majesty the Queen of England called the crisis ‘Awful’. Her Majesty is known for her remarkable ability to clad public display of emotions. This paper aims to examine the failings of the mainstream economics in light of the existing scholarly literature on the topic. The authors believe that the mainstream economic is in dire need of overhaul.

Keywords: Neoclassical Economics; Alfred Marshall; Leon Walras; Mainstream Economics (search for similar items in EconPapers)
JEL-codes: B10 B13 (search for similar items in EconPapers)
Date: 2019
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