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Probably unrealistic assumptions are pervasive in neoclassical economic theory (also called the "standard theory" or "neoclassical paradigm"), and those assumptions are inherited by simplified models for that theory. (Any model based on a flawed theory, cannot transcend the limitations of that theory.)
Bounded rationality attempts to address assumption points discussed within neoclassical economics theory during the 1950s. This theory assumes that the complex problem, the way in which the problem is presented, all alternative choices, and a utility function, are all provided to decision-makers in advance, [24] where this may not be realistic ...
Standard economic theory suggests that in relatively open international financial markets, the savings of any country would flow to countries with the most productive investment opportunities; hence, saving rates and domestic investment rates would be uncorrelated, contrary to the empirical evidence suggested by Martin Feldstein and Charles ...
Noting that in the natural sciences, "investigators rush to check out the validity of claims made by rival laboratories and then build on them," Summers points out that this rarely happen in economics, which to him is a result of the fact that "the results [of econometric studies] are rarely an important input to theory creation or the ...
This complexity can be attributed to the diversity of factors that determine economic activity; these factors include: individual and cooperative decision processes, resource limitations, environmental and geographical constraints, institutional and legal requirements and purely random fluctuations. Economists therefore must make a reasoned ...
Unlike the unbounded rationality assumed in rational choice theory, in which conclusions are reached based upon all necessary relevant information being available for consideration, the realistic limitations of most decision-making scenarios force human beings to search for data, a process that requires time, effort, and other resources that ...
Criticisms of the labor theory of value affect the historical concept of labor theory of value (LTV) which spans classical economics, liberal economics, Marxian economics, neo-Marxian economics, and anarchist economics. As an economic theory of value, LTV is widely attributed to Marx and Marxian economics despite Marx himself pointing out the ...
post-keynesian economics disagrees with the notion of the long-term neutrality of demand, arguing that there is no natural tendency for a competitive market economy to reach full employment. Other viewpoints on economic issues from outside mainstream economics include dependency theory and world systems theory in the study of international ...