Welcome!

This blog is a modest contribution to New Economic Thinking. We hope through it to contribute in a small way to changing graduate education in economics and the subject itself. The blog presents critical commentary on the standard textbook, “Microeconomic Theory” (by Andreu Mas-Colell, Michael Whinston and Jerry Green) or MWG, which is used in Ph.D. programs in economics around the world and widely viewed as an academic standard. Our goal is to selectively comment on the material presented in MWG, which forms the core of what is often thought to be the most technical and difficult material in the standard first year Ph.D. curriculum, in an attempt to better contextualize the subject, and to introduce critical and alternative perspectives on the concepts and techniques presented in the text (and more generally on standard microeconomic theory).  

The blog is intended for any student taking an advanced microeconomics course, any faculty member teaching such material, or indeed anyone interested in microeconomics and its role in the discipline.  [The blog is loosely connected to the Ph.D. level class on advanced microeconomics being taught by Sanjay G. Reddy at The New School for Social Research in the Fall of 2012, during which period it will initially run, but this connection is incidental].  We hope that the blog will help you form your own judgments and deepen your understanding of debates in economics and in social enquiry. We welcome and encourage your comments and active participation. 

Please watch our introductory video:

Comments

0

Down to earth project!

0

Never having bothered to read the book, this is the perfect occasion! Heartfelt thanks.

0

as a current econ grad student reading MWG, I'm very excited for more of this!

0

Restating points made by Beinhocker ("complexity economics") about this book: The first and most important thing to note about MWG is that it is almost entirely devoid of empirical evidence. This is probably the only graduate textbook in any field that can claim this dubious honor. The second thing to note is the astonishing number of absolutely wrong assumptions (in the authors' own words). Silly assumptions lead to silly models, which are right some of the time (like a broken watch that shows the correct time twice a day). Many of the results that are derived in this book hold if and only if the assumptions are valid. But everyone agrees that the assumptions are wrong!

0

This looks interesting! Suggestion: please tell us in advance what chapters or topics you would be covering.

0

I am very much looking forward to this discussion! That said, if one were to approach "holistically", does that mean attempting to represent non-traditional ideas into Economics using the formality of mathematical arguments? Is it merely coming up with better assumptions that can be modeled mathematically?

0

Why not turn your PhD class associated with this textbook into an online class?
It will mean a lot of work (and you will need more people), but the revolution is not a tea party...

0

Why don't you turn the associated PhD-class into an online class? If it's too much work, you can perhaps crowd-source and crowd-found it?
(I am trying to assemble a crowd).

+1

Great idea, Christian. We are thinking about exactly that and are assembling materials toward that end, with this blog as an initial experiment. Thanks also for the offer of assembling the crowd. Given the complexity of many topics in microeconomics, and the scope of the subject, no one person or group can do the job well without it becoming consuming.  Both for this reason and to reflect the diversity of perspectives on the subject, a more democratic approach is most promising.

0

We very much intend to discuss the limitations of mathematical models generally, and of specific mathematical models introduced in the text, while not adopting a stance against modeling or against mathematics as such.

0

In the next week we will begin a discussion of the first two chapters of the book. 

0

Can you name one model, in the physical or social sciences, whose assumptions are right? What makes those assumptions right?

0

Computability of predictable system´ paths foreseen under certain assumptions yields a reasonable criterion upon which to choose among different sets of assumptions. Here, the rightness rests on the quality of being reasonable: so far as a predicted path be computable, it would be chosen in terms of such a criterion as that one giving membership to reasonably foreseeable/predictable objects.

0

You can't just throw the word 'assumption' around like that. Different types of assumptions have different effects - negligibility assumptions eliminate a particular aspect of the problem, for example. Domain assumptions mean the results are only true as long as the assumption is. Heuristic assumptions are simply wrong and are replaced by something else later.

0

(Sorry for my bad English).It is a great idea to discuss about Mas-Collel´s book. I am reading it for my class of Advance Microeconomics in Peru, so I have some questions about its limited perspective about some anomalies exposed by behavioural economics. Another good question could be: do this theory contrasts between desires and needs?

0

It is ok to assume that friction does not exist if the resulting model is approximately correct when friction does exist. The assumption that friction does not exist is wrong but it is still appropriate. However, in economics, the models are incorrect when the assumptions are relaxed. Such assumptions are "wrong" in that they are inappropriate.

0

As an outsider (following this debate with great interest)this all sounds pretty alarming - the fundamental assumptions and the basic text books are wrong?! Economic ativity is still going on - roaring away all over the planet. Am I to understand that nobody really understands how it works or how to control it? If the banking industry can get so completely out of control as to sink the western economies by following these wrong ideas, what is happening in the food and energy industries that are run by people educated with these same ideas? Are they going to collapse in the same way? Help!

0

Sanjay is a great economist and I find this route promising. We also need a blog like this on development economics. Recently, I was reading Arthur Lewis' original paper- the dual sector model and was surprised to see such a wide range of perspective in the paper from an astute reading of the 19th century political economy classics and its relevance to the economies of developing countries of the 1950's. In addition, the paper encapsulates a historical analysis of migration trends. Lewis also travelled to every developing country he wrote on engaging himself in close observation of their economies, their histories and social structures. What happens in economics today is an overemphasis on theory which does not really apply in the world and a complete neglect of observation and historical analysis. I don't think all theory is bunk, some of it is clearly relevant. However, economists fail the confidence test by not engaging in adequate field work and fail to engage with disciplines like sociology and anthropology in developing their theoretical concepts.

0

I can't not even count how many hours I spent reading MWG during my first year in my doctoral program and wondering why this textbook was still the preferred tool.

After working as economic analyst for a Fortune 500 company before and during the "Great Recession," it blows my mind that we are still being taught with this type of material and that it continues to be highly regarded by academics. It is 100% disconnected from reality. Not every PhD economist wants to be a theorist, and while a mastery of the fundamental theory is required to gain doctoral-level expertise, I found this textbook's content unnecessarily difficult to convey even the most rudimentary concepts in the field.

It is time to put aside pride and implement a radical change in the economics curriculum that teaches us how to build realistic models and how to develop intuition to understand economic dynamics rather than wasting our time with useless problem sets and proofs that at the end of the day, we don't even know what we have solved for.

0

Dear Cesar,

Thank you for your comment! We tried to address the difference between desires and needs in this post: Pleasure, Happiness and Fulfillment: The Trouble With Utility.

If you have any thoughts on this, would love to hear them.

Best, Raphaele

 

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