Crossing to behavioral economy from creative destruction in economy

• Published in: Academic review of economics and administrative sciences 2014-01, Vol.7 (1), p.36-55
• Main Authors: Kurtoglu, Ramazan, Firat, Emine
• Format: Article
• Language: Turkish
• Subjects: Behavioural economics; Economic behaviour; Economic crisis; Globalization; Market economy; Neoliberalism
• ISSN: 1308-4208

// ABSTRACT IN ENGLISH: Neoliberal economic theory is based on the two invisible hand assumption parameters as rational man and active marketing. Neoliberal macro economic theory is not sufficient enough to explain current economic and financial developments. Behavioral economics has emerged as an interdisciplinary science and developed quickly in recent years. Financial disasters have been one of the most discussed subjects in economy literature. Economic depressions, which are observed in developed and developing countries. are not a new concept. Many theories and solution proposals about economic depressions have been brought up from past to present. Some economists have stated that there is no such thing as depression and defended that the markets are perfectly effective. They have said that the state shall absolutely not interfere in the self regulating process of the market which is called as "the invisible hand". According to these economists, state interference lengthens the after crisis confusion and causes the public debt to increase dangerously. However according to some other economists, the state shall immediately interfere in the process providing widespread financial stimulations to a large extent. In the process of neoliberalism - globalization - financialization, on each time the psychological operations of "this time it shall be different" have often caused depressions to occur that are based on financial speculations and ultimately they turned into economic crises. Though the 2008 global crisis have changed everybody's way of thinking about the concept of economic system. After the Second World War, it is not surprising that many people have had the obligation of choosing one of the two big ideologies such as capitalism and communism. In late 1980s, Schumpeter's "creative destruction winds" turned into tornados of neoliberalism. With the experienced global crisis in 2008, the importance of behavioural economics is one more time understood. In our times, globalizing neoliberal free markets bring about new economic understanding, which will dominate the new economy. In the 21st century behavioral economy will be the basic determining factor.