Comments on the approach of Institutional Economics

Abstract

The aim of this paper is to offer a general overview of the institutionalist approach to economics, hoping to make clear some of its main advantages as a framework of study of the economic process. In doing so, a brief exposition about some of the weaknesses of neoclassical economics will be performed in latter sections of the article -being one of them the ignorance of its own implicit value premises. The paper concludes that the advantages of the institutionalist framework are anchored on the fact that it offers a broader perspective about the social system, a more plausible hypothesis than the equilibrium one about the functioning of the social system -the cumulative circular causation-, a cautious treatment of quantitative analysis, and the recognition of the impossibility to avoid value premises in scientific analysis.Institutional economics; Gunnar Myrdal; value premises; economic methodology; transdisciplinary