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Moving the Curriculum into the Twenty-First Century: Recent Advances in Economic Theory and Undergraduate Economics

38 Pages Posted: 3 Nov 2008  

William D. Ferguson

Grinnell College - Department of Economics

Date Written: October 17, 2008

Abstract

Undergraduate economics lags behind cutting-edge economic theory. This paper briefly reviews seven related advances: game theory modeling, information economics, social preference, conceptualizing rationality, contracting/enforcement, collective-action problems, and social mechanisms/institutions. These developments profoundly extend and deepen economic analysis. A game-theoretic political-economy perspective facilitates their integration into the undergraduate curriculum. This paper offers specific concepts for introductory economics including reciprocity as a fundamental element of utility and implications of non-rival knowledge on economic growth. If offers prisoners' dilemma representations of collective-action problems as an analytical framework, on par with supply/demand, for analyzing market failures, enforcement, market structure, institutional prerequisites for successful exchange, and policy. The paper closes with ideas for more advanced courses, e.g. asymmetric information, social preference, or institutional construction, yielding implications on efficiency and distribution.

JEL Classification: A10, A11, A22

Suggested Citation

Ferguson, William D., Moving the Curriculum into the Twenty-First Century: Recent Advances in Economic Theory and Undergraduate Economics (October 17, 2008). Available at SSRN: https://ssrn.com/abstract=1292840 or http://dx.doi.org/10.2139/ssrn.1292840

William D. Ferguson (Contact Author)

Grinnell College - Department of Economics ( email )

P.O. Box 805
1210 Park Street
Grinnell, IA 50112
United States
641-269-3132 (Phone)
641-269-4985 (Fax)

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