Behavioural Economics and Interdisciplinary Dialogue (21st Century)
Economic Methodology and the Evolution of Economic Thought
AO2
Syllabus requirement
Highlights insights from psychology about bounded rationality, heuristics and biases, and their policy implications.
Assessment objectives
AO2 Application and Analysis
Summary
This topic explains behavioural economics' growing influence in the twenty-first century and focuses on economic methodology, especially the distinction between positive and normative economics. It emphasises positive economics as objective, testable statements about 'what is', and the role of logic, reasoning and empirical evidence in forming and testing economic hypotheses and models.