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From 1950s to 1990s, game theory, as an increasingly widely used economic analysis tool, experienced the process from its initial emergence to its improvement and perfection. From the complete information static game and Nash equilibrium in the early 1950s, to the complete information dynamic game and sub-game refined Nash equilibrium in the mid-1960s, to the incomplete information static game and Bayesian Nash equilibrium in the late 1960s, and to the incomplete information dynamic game and refined Bayesian Nash equilibrium in the 1970s and 1980s. Nash, Zelten, Hasani, Cripps, Wilson, Fodenberg, Tirole are all promoting the deepening and perfection of game theory research. At the same time, the status of game theory in western mainstream economics is increasingly prominent. Its application field has rapidly expanded from the initial study of industrial organization to the microeconomic and macroeconomic fields such as industrial and labor relations, enterprise pricing, credit and insurance, international trade, public finance and monetary policy, which greatly enhanced the explanatory power of economic theory.
In addition to game theory research, in the field of microeconomics research, James? Heckman's theory of selective deviation in sample selection and the establishment of two-stage estimation research method and Daniel? Mcfadden's innovation in the theory and method of discrete choice behavior research: in the field of experimental economics research, Vernon? Smith and others are creating an economic experimental method by introducing market experiments into microeconomic analysis; In the field of financial econometrics research, Robert? ARCH (autoregressive conditional heteroscedasticity) model founded by Engel and Clive? The cointegration model founded by Granger is also the innovation of basic analytical tools in economic theory research.
The innovation of economic analysis tools has greatly enhanced the logical power in economic theory research. Like John. Macmillan pointed out that "technology is indispensable in economic research. Only through strict modeling can people truly understand the correctness of a new idea. " The greatest historical achievement of academic-oriented economic theory research lies in promoting the scientific process of economic theory research and expanding the economy.
The scientificity of science as a social science. Although in the field of social science research, including economics research, there have been great differences of views on the subject nature and scientific issues of economics, including the mathematization and formalization of economic theory research. However, there are still quite a few economists who believe that Milton? Professor Friedman's basic views on the nature of economics and empirical research methods still represent the development direction of economics to a great extent. In essence, although economics and natural science are in different social science research fields, they are the same as many disciplines in natural science.
On the one hand, what they are trying to explore is the relationship, action mechanism or changing law between things in the form of different variables, with the aim of making a correct prediction that conforms to the law of movement or development of things themselves.
The study of economic theory oriented to real economic problems and economic theory oriented to real economic problems is mainly aimed at new problems or newly discovered problems that have been neglected in social and economic operations and economic activities. The study of economic theory oriented to realistic economic problems is not only to explain economic problems with existing economic theories, but more importantly, when the existing economic theories are challenged by new economic problems and cannot be convincingly explained with traditional economic theories and analytical frameworks, economists make new theoretical explanations of economic problems by revising, improving and perfecting the original economic theories or creating new economic theories. Therefore, although this kind of economic theory research is oriented to real economic problems, it is essentially the same as the pure economic theory research oriented to academic problems and belongs to the theoretical innovation research of economics.
Of course, from the purpose and function of economic theory research, economic theory research oriented to real economic problems often directly becomes the theoretical basis for formulating economic policies to solve social problems. Taking macroeconomic research as an example, the establishment, development and perfection of macroeconomic theory itself is the result of very typical economic theory research facing real economic problems.
As we all know, according to "Say's Law" and neoclassical economic theory represented by Marshall and Walras, the market has the function of automatic adjustment, and it is impossible to have an economic crisis characterized by the continuous imbalance between total social and economic supply and total demand. However, the world economic crisis from the late 1920s to 1930s put neoclassical economic theory in an extremely embarrassing situation. Joan? Mrs Robinson called it the "first crisis" of economics. Facing the dilemma of the Great Depression, Keynes deeply reflected on the labor market theory, capital market theory and money market theory of neoclassical economics. In the book General Theory of Employment, Interest and Money, the effective demand theory is established to explain unemployment and economic crisis. According to Keynes's theory, effective demand can be divided into consumption demand and investment demand. The decline of marginal propensity to consume will lead to insufficient consumption demand, the decline of marginal efficiency of capital and liquidity preference and the corresponding liquidity trap will lead to insufficient investment demand, while insufficient effective demand will lead to unemployment and economic crisis. Keynes's effective demand theory not only laid a foundation for the establishment of modern macroeconomics, but also provided a theoretical basis for the post-war western countries to use fiscal and monetary policies for macro-control. When interviewed more than a dozen Nobel laureates in economics in the Wall Street Journal recently, when asked who was the most outstanding economist in the 20th century, most economists mentioned Keynes. Is there Joseph among them? e？ Stiglitz believes that Keynes's theory makes economists realize the persistence of unemployment and the existence of economic equilibrium of underemployment; He established a new economic theory, promoted the development of economics, was a major breakthrough in economic research, and had a far-reaching impact on economic operation.
From the 1950s to the present, the development of macroeconomic theory in modern economics can be said to be an economic theory research oriented to real economic problems to a great extent. For example, Paul of the neo-classical comprehensive school? Samuelson and others explained the alternating relationship between inflation rate and unemployment rate with Phillips curve, and put forward corresponding fiscal and monetary policies accordingly. What about Milton of the monetarist school? Friedman and Edward? According to the new characteristics of inflation and unemployment, phelps and others further demonstrated the short-term Phillips curve, the long-term Phillips curve and the additional expected Phillips curve, thus further explaining the various complex relationships between inflation and unemployment under different macroeconomic operation backgrounds. The further in-depth study of inflation and unemployment finally led to the birth of "rational expectation theory" represented by Lucas and Sargent in the field of macroeconomics, which on the one hand strengthened and expanded the micro-foundation of macroeconomic theory, on the other hand greatly influenced the orientation of macroeconomic policies. In fact, the "time consistency problem" (dynamic inconsistency problem) in the application of macroeconomic policies put forward by Kidland and Prescott, the winners of the Nobel Prize in Economics in 2004, is also a breakthrough in the research of economic theory facing real economic problems in this research field.
In addition, in the development of macroeconomic theory, Okun's law and new economics put forward by Okun and Tobin for the problems of national income growth and employment, and Mundell-Fleming model put forward by Mundell for the problems of balance of payments and exchange rate changes in the open economy system also belong to the economic theoretical research for real economic problems. Similarly, in the research field of development economics, most of the economic theories of Lewis, Schultz, Mildred and others can also be classified as economic theory research oriented to real economic problems.
In fact, there are differences in understanding whether the economic research oriented to real economic problems belongs to the theoretical research of economics. Some economists even think that only the metaphysical pure economic theory research is the real academic research, while the metaphysical real economic problem research is the work of "third-rate economists" and cannot be considered as theoretical research or even academic research. This is actually a biased and misleading view.
In fact, there are three kinds of research results produced by economic research oriented to real economic problems: the first kind is research on developing new economic theories and/or economic analysis tools; The second is to use the existing economic theory and economic analysis tools to explain new economic problems or better explain the original economic problems; The third is to use the existing economic theory and tools to analyze the economic problems to be solved and put forward the economic policy research to solve the problems. From the perspective of economic theory research, the latter two types of economic research mainly expand the explanatory power of economic theory to economic problems, so they cannot be completely excluded from the scope of economic theory research as a whole. As for this type of practical problem-oriented economic research, although its starting point is the metaphysical practical economic problem, the research result is the metaphysical original economic theory, so it should undoubtedly be regarded as the theoretical research of economics. If we observe the top economic journals in western economics with the aim of economic theory research without prejudice, we can find that a considerable proportion of research documents are also theoretically studied from the perspective of "physical" real economic problems, and even most of them can only belong to the above-mentioned second type of economic research at this stage. Here, it needs to be emphasized and clearly understood that the research and innovation of economic theory are not completely incompatible with the research of "physical" real economic problems (even the research of "localized" and "physical" real economic problems). The type and nature of economic research are determined not only by the problems studied, but also by the results of economic research.