Behavioral Economics

The part which I am in charge is to review one of the alternative paradigm for macroeconomics, i.e., behavioral macroeconomics. In my review, I will involve a series of work done by George Akerlof, which has been nicely summarized in his recent book, co-authored with Robert Shiller, entitled "Animal Spirits." (Notice that the above is just my plan. The formal text will come later.)

In this section, another promising alternative to the current mainstream macroeconomics, i.e., behavioral macroeconomics is briefly reviewed. While the origin of behavioral economics can be traced back to Herbert Simon in the 1950s, the term "behavioral macroeconomics'' was mainly introduced to economics much later by George Akerlof, the 2001 Nobel Laureate in Economics, in particular, through his very influential Nobel-Prize lecture (Akerlof, 2002) and his American Economic Association Presidential address (Akerlof, 2007).

References:

Akerlof G (2002) Behavioral macroeconomics and macroeconomic behavior. American Economic Review 92(3): 411-433.

Akerlof G (2007) The missing motivation in macroeconomics, American Economic Review 97:5-36.

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