Weekly essay 8. Institutional economics verses neoclassical economics.

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Institutional economics verses neoclassical economics.
Institutional economics emphasizes on the continued growth process and function of an institution in improving economic growth. It is also known as Veblenian economics. Neoclassical economics is an extensive view theory that majors on supply and want as a stimulating factor (Warren, 130). It’s mainly focuses on the cost of production, customer views, and the difference between production costs and sells prices. Critically analysing the institutional and neoclassical economics, there are some similarities and differences since there are different schools with different perceptions.
Institutional economics and neoclassical economics portray different characteristics. Institutional economics focuses on people´s behaviours, customs, and attitudes as a group. Financial institutions regulate the nation’s economy (Marshall, 123). They believe that the epicentre of economics is behaviour. Neoclassical economics based on individuals’ behaviours and participation of people in management. The similarity between these schools is that they both focus on individuals' habits and teamwork. The neoclassical economics claim market is always in equilibrium. Economists become agents in maximizing a given utility. It, therefore, focuses on the economists so that maximum efficiency can be optimized. It is not flexible. It depends on how much information the economists can get.
Institutional economics is flexible, rational and dependent on the supply of production factors. Economists claim unemployment is inexistent in this class. Unlike neoclassical economics, each individual has th...