Introduction to Economics for Psychologists

Economics is about the allocation of resources in society. Our

economic structure, and the way we allocate those resources, affects the

way we live, think and feel. Why is there inequality amid plenty? Where

does money come from? Why are exchange rates important? Why do

we allow pollution of our planet? What is the role of firm? How do

markets work?

These questions and others are important because as individuals,

as families we both benefit from and suffer that system. Our

psychological health and the wellbeing of the societies in which we live is

a product of the economic system. That is why we must understand how

it works and the mechanisms that make it work.

This course is intended to help you answer these questions and

both understand and where appropriate question the system. You will

therefore be introduced both to mainstream and heterodox perspectives

in economics.

The course commences with a study of the industrial revolution

and what is meant by capitalism. It then considers markets looking at

how they work and their functionality and dysfunctionality. Alternatives

to markets are considered and what can be done to make markets more

effective.

The tax system, inequality, unemployment and inflation then

follow. The economic choices facing Governments and the instruments,

such as fiscal and monetary policy, used to achieve economic objectives

will be examined. Money and the banking system, the euro and the

economic dimension of the European Union are then considered.

The psychological turn in economic will be examined both in

detail and in the context of economics generally. The psychological

factors that cause financial crisis and financial euphoria will be explored.

The international dimension will be considered particularly the impact of

globalization and its economic significance for society. If time permits we

will also consider the increasing importance of intellectual property

rights, international organizations and environmental issues.

The course will take a critical view of the subject and present

alternative perspectives.

This course will use material from a variety of sources and is

loosely based on the CORE curriculum developed by London University,

Oxford University and other leading universities. The CORE program is

aimed at making economics directly relevant to our economic and

political life rather than just treating it as an abstract academic

discipline. Theory will always be related to praxis. The course will not

include quantitative or mathematical calculations but will rather focus on

the social and the psychological.

The student will be able to understand the dynamics of the economic

system, appreciate the link between psychological and economic

behavior and recognize that value systems determine economic choices.

Two absences during the course. Further absences will affect the final

grade.

Student presentation and attendance 15%. Three intermediate tests

35%, Final examination 50%.