The disconnect between today’s economic theories and what we see in the real world is stark and widely acknowledged. A series of major economic approaches—Keynesian, monetarist, new classical, and most recently the great moderation—have failed us with drastic consequences. We’ve hit a crisis point, with fiscal cliffs, bank bailouts, sovereign debt crises, massive deficits, widespread public demonstrations and deadlocked lobby-driven politics. More troubling is that we continue down the same road—because even our experts are relying on flawed theory.
It’s time to replace our way of thinking right from the basics. Here we introduce a new stream of Behavioral Economics, called Causal Economics. It’s a single pragmatic model which takes account of economic, political, sociological and psychological influences to a decision—and it’s boiled down to a simple construct that we can apply in business.
Even though Causal Economics is a theory of economic behavior, like Behavioral Economics it is highly applicable in business and marketing in particular. As buyer behavior and competitive pressure move faster than ever in today’s markets, Causal Economics provides new insights for driving purchase conversions and building sustainable competitive advantage.
Review the foundational academic research on Heliyon here.