The paper "Strengths of Institutional Economics and the Weakness of Ecological Economics" is a great example of an essay on macro and microeconomics. Institutional economics has two major schools; New and Old Institutional Economics. Though they are on some occasions considered incommensurable, they have co-existed for a long time. The old institutional economics represents a unified body of methodology, thought, and program of research. In addition, OIE is normally criticized for not being based on a theoretical basis. The NIE utilizes a set of theories that are very clear from the onset.
The first popularity of the NIE was because it was a little messy and its theories were highly quantitative. The disappearance of institutional economics has been pronounced on a number of occasions and traditional economists seen to deliver most part of the eulogies (Hunt 7). The usual illustration given is that of an intellectual comet that sparked bright flames shortly and then succumbed to natural death. The strength of institutional economics is based on its explanatory power of concepts, not the power in its numbers (Acemoglu 13). The fact that its influence and membership dwindled during the post World War II era still the ideas were not of attrition.
No matter the differences among institutional economists, institutionalism has a fundamental set of beliefs. Strengths of Institutional Economics and ways of making it more compatible with the Ecological Institution Economics: The attempt to move economics above the shortcomings and limitations of neoclassical models and methods and the prospect of it being realized is very exciting (Hunt 16). It’ s therefore, not my wish to discuss all these achievements but rather focus more precisely on the developments in institutional economics. The social, political, economic, and legal institutions (“ institutions” ) have a significant effect on the performance of the economy (Acemoglu 36).
The effects of alternative policies of public seven geared towards developing economic performance in several dimensions differ along with the institutions that are designed to respond to them (Aronson, Milton & Blignaut 22).
Acemoglu, Daron. (2003). Root Causes: A Historical Approach to Assessing the Role of
Institutions in Economic Development. New York: John-Wiley.
Aronson, S.J., Milton, E.& Blignaut, O. (2008). Restoring Natural Capital. Washington: Island Press.
Baran, P., & Sweezy, P.M. (2002). Monopoly Capital. New York: Monthly Review Press.
Commons, John R. “The Problems of Correlating Law, Economics and Ethics.”
Wisconsin Law Review 8.1(2001): 3-26. Print.
Daly, H. E. & J. Farley. (2006). Ecological Economics: Principles and Applications. Washington: Covelo.
Farley, J. & Gaddis, B. (2007). Restoring natural capital: An Ecological Economics Assessment. California: University of California Press.
Hamilton, David. “The Political Economy of Poverty: Institutional and Technological Dimensions.” Journal of Economic Issues 1.4 (1999): 309-320. Print.
Hunt, E.K. (2002). History of Economic Thought. New York: M.E. Sharpe.
North, Douglas. (2008). “Institutions.” Journal of Economic Perspectives 5. 1(2008): 97-112. Print.
Williamson, Oliver. (2005). “The New Institutional Economics: Taking Stock, Looking
Ahead.” Journal of Economic Literature 38. 12 (2005): 595-613. Print.