TITLE:
Psychological Economics: The Case-Studies of Eurozone, Global Economic Crisis and Greece
AUTHORS:
Alexandros M. Goulielmos
KEYWORDS:
Psychology in Microeconomics-Utility, Keynes’ Four Macroeconomic Psychological Propensities, Keynes’ Microeconomics, The Demand Curve from “Pareto’s Power Law”, Hicks’ IS/LM Curves, Swan-Solow Diagram, Eurozone-Greece-GFC-Case-Studies
JOURNAL NAME:
Modern Economy,
Vol.9 No.11,
November
15,
2018
ABSTRACT: We showed what Economics owes to Psychology … in Microeconomics with utility and in Macroeconomics
with the 4 propensities to consume,
to save, to invest and to hold cash. Psychology is a science in-the-making, but
par excellence essential in Keynes’ model. Keynes’ 3 independent variables—consumption, rate of interest and marginal
efficiency of capital, are presented (in the appendix). We also derived a
“demand curve” for goods, using “Pareto’s power law”. We showed (partly)
Keynes’ microeconomics, something which many argued Keynes lacked. We took—in
addition—the opportunity to use Hicks’ IS/LM curves.
Moreover, we used the “Swan-Solow” diagram. These 3 diagrams helped us to
present the situation in Eurozone, in our country Greece, and from the impact
of the “Global financial crisis” (GFC) since end 2008, drawing on Temin &
Vines [3] and … of course on Keynes [1]. We saw that emphasis in the quality of
goods, which we consume, and in the proper attention to the environment, we
live, was largely absent! Economists escaped from their half responsibilities
by an alibi saying that: our science is “about what is” …