ABSTRACT
This chapter describes the difference between mainstream economics, progressive political economy, and radical political economy, using their different definitions of economics and their different methods. It explores microeconomic and macroeconomic examples of how different economists view important economic issues. The chapter presents a brief example of how economic debates and a government’s economic policy can matter to us all. The differences between mainstream economics and political economics were covered, along with how the conservative, liberal, and radical political approaches to economics affect the size of government in various economies. To mainstream economists, economics involves studying the costs and benefits of the decisions facing consumers, producers and governments, and making rational choices between alternatives using society’s limited resources. The scientific approach to economics, in which economists make simplifying assumptions to construct models and then test those models against the real world, is often called positive economics.
