Quote from admin on March 4, 2021, 10:04 pm

Analysis: All economies are comprised of agents.  Agents are decision makers motivated by institutions in the economy. There are three major economic agents--–the households, firms and the government. They all make short-term and long-term decisions about maximizing their pleasure/satisfaction for the households, profits/value for the firms and social welfare for the government. Economic development arises from the choices and actions of these economic agents. People are these agents, therefore, the institutions in which they grow up and live become relevant in their choices.

Mainstream economic school of thought, which dominates the literature, by their assumption of “rational choice,” implies that the ability to make rational economic decision is hereditary. Meaning, the economic man was born.  Evolutionary economics, a subdued non-orthodox economics, says that is crap; no baby was preprogrammed at birth to make sound economic choices.Prevailing institutions are largely the determinant of individual behaviors including economic choices. You tickle people’s fundamental institutions and their choices are altered. That is, the economic man was made. Why is this important to economic development programs? Because trickle-down macroeconomic and global trade development models are based on the mainstream economic assumptions. Now, was the economic man born or made?