Economic theory: Consult academic journals for relevant topics

Economic theory can help show you the right model for the current and future market. (Credit: Jon Berkely)

Economic theory can help show you the right model for the current and future market. (Credit: Jon Berkely)

For good research paper topics for your economic theory course, consult academic journals, search the Internet and read scholarly articles for relevant topics in today’s study of economic theory and modeling. Do today’s economic models work? Should modeling reflect expectations of the market? Should the field of economics be overhauled in the wake of the economic crisis of 2008? These are some topics to consider for your economics term paper.

Economic models that reflect expectation

One topic could be to write about economic modeling versus expectations. In the wake of the global financial crisis, some economists think macroeconomic theory and policy should focus not only on the analysis of monetary policy rules but also on decisions about individual policy actions.

“One cannot solve for the consequences of a given action (say, purchases of a certain quantity of Treasury securities by the Fed this month) without specifying what people expect about future outcomes (e.g., future inflation)… Hence the object of analysis must always be a complete specification of current and future policy, including how policy can be expected to respond to all possible future developments,” wrote Michael Woodford in the 2013 book “Rethinking Expectations: The Way Forward for Macroeconomics,” edited by Roman Frydman and Edmund S. Phelps.

The nature of business corporations

Economic theory can also explain the nature of business corporations, and can highlight issues with the idea of treating corporations as people. “[Corporations] can be seen as mere aggregations of natural persons or as entities in their own right. As entities, they have been described as either natural or artificial, and the idea of the corporation as a person is itself fraught with ambiguity,” noted David Millon in “Two Models of Corporate Social Responsibility” in Wake Forest Law Review, published September 2011.

He discussed two sides of the debate on corporations and social responsibility: “One is familiar and has impeded efforts to argue that corporations should be managed with attention to their obligations to society. The other, less familiar perspective draws on the concept of sustainability and offers potentially more promising prospects for those concerned about corporate social responsibility.”

Millon explained that the first view of corporations (as aggregations) is structural, focusing on the various elements of the corporation, including management, shareholders, employees, creditors, etc., each with its own interests which often conflict with the other elements’ interests.

The second view is temporal, focusing on the corporation as an entity existing in time, functioning as a distinct person. This way the corporation can interact with external elements to ensure its long-term survival.

How has the economic downturn affected the profession of economics?

Another idea for a research paper topic is to study the reputation of the economics profession itself in the wake of the worst economic downturn since the Great Depression. In the Economist, a contributor remarked in “What went wrong with economics” posted July 16, 2009: “two central parts of the discipline—macroeconomics and financial economics—are now, rightly, being severely re-examined. … There are three main critiques: that macro and financial economists helped cause the crisis, that they failed to spot it, and that they have no idea how to fix it.”

A major reason economists were blindsided when the crisis hit was the tendency for specialists to be cloistered in their professional silos. The writer suggested some changes: “Economists need to reach out from their specialised silos: macroeconomists must understand finance, and finance professors need to think harder about the context within which markets work.”

As to how to fix the crisis, purists and Keynesians argue about monetary policy. As a result, the writer offered a clear case for reinvention in macroeconomic theory.

Check out Questia’s Economics and Business library for more information on economic theory.

What suggestions do you have for finding information on economic theory?

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