THE BEHAVIORAL ECONOMICS: AN INFLUENCE OF PSYCHOLOGICAL FACTORS ON THE ECONOMIC GROWTH

Dmitry Mikhailovich Vukolov

Abstract


Psychology as a branch of science could not take its place in the world for a long time. This fact says about a huge omission of a mass of intelligence by a human. However, the time overtook its own, and psychology became more significant for people and the economy in general. Being a science that would not exist without a human, it is impossible to omit its influence in it. Therefore, the main goal of this work is to consider the influence of behavioral mechanisms on decision-making by economic agents and, as a result, on economic growth. The theoretical part is closely interconnected with the practical part. This explains why the article does not have a clear separation between the two ones. Openings within the frame of behavioral economics embrace both the present and the past, which are aimed at showing both the fundamental nature of this knowledge and its undisputable relevance. These factors together represent a brief history of the development of this branch of knowledge. Through the prism of the main achievements of scientists of different years in the sphere of behavioral economics the irrational behavior of consumers was analyzed. This behavior was reflected in the examples, which showed simultaneously both:  the main flaws of the classical macroeconomic models, and the importance of considering behavioral economics when analyzing aggregate demand and aggregate supply.


Keywords


behavioral economics, decision making, effect, expectations, inflation, economic growth, rationality

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References


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