911±¬ÁÏÍø

Module Content:

This course offers a new approach to how we interpret the economy as a source of prosperity. We see the economy as a system for the creation and use of knowledge. We use the term ‘system’ to emphasise connections rather than outcomes, and ‘knowledge’ to emphasise fundamental uncertainty rather than risk. Rather than leaving us powerless to act because we cannot know the full consequences of our actions, our psychological desire to understand stimulates our imagination to interpret patterns of observations. We learned long ago that our understanding can be assured, deepened or challenged by interacting with other people. This implies that direct human interaction is the ultimate source of prosperity (as well as adverse outcomes). All value becomes social.Ìý

We intend this module to be a conceptual grounding for students’ exploration of prosperity. It is an advanced course which draws on common ideas from the ESRC’s Rebuilding Macroeconomics interdisciplinary network, which is now part of the Institute for Global Prosperity. We consider this to be a highly innovative course which will include class exercises to explore our economic relations, including games from experimental economics, simple agent-based computer simulations, emergent processes and network properties of self-organisation. Ìý

Students will learn a new way to look at the economy, being located within the social domain, itself within the wider environmental context. We interpret the economy as a means of creating and using knowledge as a basis for prosperity. The economy is an evolving process which is self-organizing, but not necessarily self-stabilizing. Our challenge is to understand this self-organising property. Many outcomes other than an equilibrium are possible and the role of institutions becomes and important public policy question. This approach allows us to address the time-honoured big macroeconomic questions of wealth creation, sustainability, resilience distribution, and public policy.Ìý

This module is an important complement to courses offered elsewhere at 911±¬ÁÏÍø. We extend the economics of choice to everyday contexts of fundamental uncertainty. The tools we use are increasingly used in economic research, but not generally taught in standard Econ Masters degree courses. The IIPP course on New Economic Thinking is complementary as uncertainty is implicit in classical economics, but it is not usually the focus of histories of thought. We suggest this course as an advanced elective appealing to students taking the MSc Global Prosperity and MSc Prosperity, Innovation and Enterprise.ÌýÌý

Illustrative module outline:Ìý

This module is taught through ten classes (see below) and additional seminars (for computer work and presentations). Students are expected to complete the set key readings prior to the start of the teaching session and to come prepared to discuss key topics and issues from the readings. There will be a series of participation exercises based on economic experiments, for example to explore how markets clear and how alternative contextual conditioning can lead to different outcomes. We have two MCQs to check progress, but these are not part of the assessment.Ìý

List of Illustrative classes:Ìý

1. Where did we come from and why are we special?Ìý

2. Uncertainty, cognition, and social interactionÌý

3. Complex adaptive systemsÌý

4. Institutions in response to uncertaintyÌý

5. Coordination, networks, and stabilityÌý

6. Creativity and collective intelligenceÌý

7. Organisation and productivityÌý

8. Markets and their limitsÌý

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