Empirical rejection of mainstream economics' core postulates -on prices, firms' profits and markets structure

Joaquim Vergés-Jaime

MPRA Paper from University Library of Munich, Germany

Abstract: Mainstream economics relies largely on deductive assumptions –not resulting from a systematic gathering of observations. Among them, those assumptions on prices determination by firms, firms’ size relative to market demand, and the prevailing market structure regarding the competition/monopoly axis. The present paper is devoted to presenting the results of confronting these assumptions with the extensive empirical evidence about. As a result it is argued here that these core assumptions cannot actually be sustained; hence, the economics’ standard model built upon them is not a useful theory to explain the workings of market economies, teach economics at class rooms, etc.

Keywords: Mainstream economics' assumptions; Firms' pricing; Empirical evidence on firms' profits; Empirical evidence on market structures (search for similar items in EconPapers)
JEL-codes: A2 B41 D01 D2 D4 D5 (search for similar items in EconPapers)
Date: 2020-09-28
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Published in Real-World Economics Review no. 93.-(2020): pp. 61-75

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