Orthodox economics is an economic stream based on the economic rationalism of the individual, the maximization of utility, and equilibrium economic models.
It is not easy to define the concept of orthodox economics.In itself, the orthodox term is related to what is generally accepted, what is traditional, what is appropriate. Consequently, orthodox economics is one that follows a doctrine, rules, principles or practices that are taken as good.
The opposite of orthodox economics is heterodox economics. So, by the definition of orthodox offered above, heterodox economics should be one that does not follow generally accepted principles or practices and that are taken as not good.
It is in the above, where the problem of defining it as such lies. If economic orthodoxy is the good thing, then heterodoxy must be the bad thing. The above, of course, is questioned by some economists, since one thing is for a current to be generally accepted by a group, or society as a whole, and another thing is that it is not valid.
With this in mind, and making it clear that the important thing about the concept is to know what it refers to beyond the value judgments that theoretical economists make, we are going to see the characteristics of orthodox economics and the main schools that are included within the same.
Characteristics of the orthodox economy
As stated in the definition, its basic pillars are rationality, utility maximization and the tendency to equilibrium. In a more developed way, the characteristics are the following:
- Economic agents are rational: It assumes that people make rational decisions based on utility criteria. That is, they always choose using reason in terms of their preferences.
- Utility maximization: In addition, they not only choose the most rational option but also maximize their utility. That is, they choose the point that offers them the most satisfaction given some assumptions.
- Equilibrium: It is very common among orthodox economists to speak of equilibria, of optimal points. That is, the economy is always in equilibrium. Let this be optimal no.
In contrast to heterodox economics, orthodox economics has a much more analytical approach, based on statistics, mathematics, and the starting assumptions generally accepted by academia. For this reason, it is more common to find jobs related to numerical content.
Orthodox economics schools
The main schools that are included within the orthodox economy are:
- Keynesian school.
- Neoliberal school.
- Marginalist school.
- Chicago School.
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