Logical Problems and the Teaching of Economics - A Plea for an Explanation

17 Pages Posted: 24 Nov 2008 Last revised: 13 Feb 2009

See all articles by Jakob Kapeller

Jakob Kapeller

University of Duisburg-Essen - Institute for Socio-Economics; University of Linz - Institute for Comprehensive Analysis of the Economy (ICAE)

Stephan Puehringer

Johannes Kepler University of Linz - Institute for Comprehensive Analysis of the Economy (ICAE)

Date Written: December 23, 2008

Abstract

The basic academic education in economic thinking is dominated by very simplified models of firms and individuals in the market. The theory of firm, which is the fundamental model of neoclassical microeconomics, therefore has great influence on the way people think about economic processes. The following paper elaborates logical inconsistencies of the standard model of neoclassical microeconomics first raised by George Stigler and extensively discussed by Steve Keen, which arise if all actors are considered to be mere price-takers. Taking this inconsistencies seriously leads to the conclusion, that - interpreting the marginal market power of the individual firms correctly - a competitive environment yields quantities, prices and profits, that differ fundamentally from those predicted by standard neoclassical microeconomic models. Therefore we want to encourage the teachers of economics to enter the debate around these inconsistencies.

JEL Classification: A22, A23, D41, D43

Suggested Citation

Kapeller, Jakob and Puehringer, Stephan, Logical Problems and the Teaching of Economics - A Plea for an Explanation (December 23, 2008). Available at SSRN: https://ssrn.com/abstract=1305377 or http://dx.doi.org/10.2139/ssrn.1305377

Jakob Kapeller (Contact Author)

University of Duisburg-Essen - Institute for Socio-Economics ( email )

Lotharstraße 65
Duisburg, 47057
Germany

University of Linz - Institute for Comprehensive Analysis of the Economy (ICAE) ( email )

Freistädterstraße 315
A-4040 Linz
Austria

Stephan Puehringer

Johannes Kepler University of Linz - Institute for Comprehensive Analysis of the Economy (ICAE) ( email )

Aubrunnerweg 3a
A-4040 Linz
Austria

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