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Prof. Yi Junjian: New Tools Emerge for Delineating Market Evolutions and Interactions

May 22-2024   



On May 20, Prof. Yi Junjian attended Academic Afternoon Tea (AAT) and gave a lecture on the interactions between culture, psychology, technology and market during economic development. He is PKU Boya Distinguished Professor and NSD Professor of Economics. AAT is a long-running event aimed at promoting cross-disciplinary exchanges between NSD faculty members and students.

 

Prof. Yi started by sharing inspirations he derived from the book The WEIRDest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous. The book adopts a grand narrative and applies a mix of anthropological, psychological, and economic methods to explain how the West became peculiar and prosperous. It gave him the inspiration that as economic research theories and tools become ever more abundant, economists are afforded the possibility to study the interactions between culture, psychology, technology, and market.

 

Taking development economics as an example, Prof. Yi summed up the trajectory that economists have traversed in their exploration of the market differences between various regions. The first generation of development economists pointed out the divergence between the development systems of developing and developed countries, but didn’t offer explanation for the underlying reasons. The second generation attempted to formulate a new development theoretical framework for developing countries, but to no avail. The third generation reverted to the theoretical system of developed countries, namely the neo-classic model, and applied it to interpret the economic and societal movements of developing countries on the basis of the idiosyncratic social norms (such as labor market friction) of a particular developing country. The fourth generation of development economists leaned more on technicality, yet steered away from systematic discussions on developing countries’ economic systems and markets.

 

According to Prof. Yi, economics in its traditional form focused on individual choice and market equilibrium, which invited criticism from other social science disciplines. Though economists had long been aware that the market was embedded in social norms such as psychology and morality, constraints such as the development level of economics and the lack of research tools led to many hidden mechanisms and stories being intentionally and unintentionally overlooked. To his delight, the constant development of economic theories and research tools over the past few decades provides a new opportunity for examining the phenomenon of market being embedded in culture.

 

He then briefly introduced the development of economic research tools from individual and aggregate levels. The former concerns the extension of preference and the enriching description of individual choice (most notably, the diverse understandings of constraints). As for the latter, Prof. Yi said that with the development of network theory, the equilibrium embedded in network provides a better tool for delineating the social and economic evolutions of developing countries. Such a tool kit, rich and potent, enables economists to start dealing with embedment questions in various regional markets. This will lay a solid foundation to achieve eventual comprehension of market evolutions and interactions, he said.

 

Prof. Yi Junjian: New Tools Emerge for Delineating Market Evolutions and Interactions

May 22-2024   



On May 20, Prof. Yi Junjian attended Academic Afternoon Tea (AAT) and gave a lecture on the interactions between culture, psychology, technology and market during economic development. He is PKU Boya Distinguished Professor and NSD Professor of Economics. AAT is a long-running event aimed at promoting cross-disciplinary exchanges between NSD faculty members and students.

 

Prof. Yi started by sharing inspirations he derived from the book The WEIRDest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous. The book adopts a grand narrative and applies a mix of anthropological, psychological, and economic methods to explain how the West became peculiar and prosperous. It gave him the inspiration that as economic research theories and tools become ever more abundant, economists are afforded the possibility to study the interactions between culture, psychology, technology, and market.

 

Taking development economics as an example, Prof. Yi summed up the trajectory that economists have traversed in their exploration of the market differences between various regions. The first generation of development economists pointed out the divergence between the development systems of developing and developed countries, but didn’t offer explanation for the underlying reasons. The second generation attempted to formulate a new development theoretical framework for developing countries, but to no avail. The third generation reverted to the theoretical system of developed countries, namely the neo-classic model, and applied it to interpret the economic and societal movements of developing countries on the basis of the idiosyncratic social norms (such as labor market friction) of a particular developing country. The fourth generation of development economists leaned more on technicality, yet steered away from systematic discussions on developing countries’ economic systems and markets.

 

According to Prof. Yi, economics in its traditional form focused on individual choice and market equilibrium, which invited criticism from other social science disciplines. Though economists had long been aware that the market was embedded in social norms such as psychology and morality, constraints such as the development level of economics and the lack of research tools led to many hidden mechanisms and stories being intentionally and unintentionally overlooked. To his delight, the constant development of economic theories and research tools over the past few decades provides a new opportunity for examining the phenomenon of market being embedded in culture.

 

He then briefly introduced the development of economic research tools from individual and aggregate levels. The former concerns the extension of preference and the enriching description of individual choice (most notably, the diverse understandings of constraints). As for the latter, Prof. Yi said that with the development of network theory, the equilibrium embedded in network provides a better tool for delineating the social and economic evolutions of developing countries. Such a tool kit, rich and potent, enables economists to start dealing with embedment questions in various regional markets. This will lay a solid foundation to achieve eventual comprehension of market evolutions and interactions, he said.