1) Does a shift towards behavioral economics undercut its usefulness as a tool for understanding our economy and society? Is the end of economics or does it open the door to the beginning of a new kind of analysis?

2) Name some of the most important ideas or tools that you have learned in this course. How can they contribute to your critical thinking tools?

As I have noted throughout this course, I ascribe to the behavioral school of economics. Here are some of the implications that conict with [or complement?) classical economic theory we have learned in this course. - People don't always make rational. self-interested economic decisions. That results in skewed, but not irrational decisions. Societies and governments need to step in to provide 'nudges' [as Nobel-prize winning economist Richard Thaler calls them) so that people make better decisions. - Prices often don't reect total cost. The clearest case for externalities is in the climate change debate. Our price of hydrocarbons in no way reects the future cost to the planet of rising temperatures. Governments can enact regulations and taxes to internalize those costs and it can support R&D to develop alternatives. I am attaching an article by Fareed Zakaria on "The End of Economics?' Please read it and discuss: 1} Does a shift towards behavioral economics undercut its usefulness as a tool for understanding our economy and society? Is the end of economics or does it open the door to the beginning of a new kind of analysis? 2} Name some of the most important ideas or tools that you have learned in this course. How can they contribute to your critical thinking tools? m | Fareed Zakaria - The End of Economicsdocx