Advanced Microeconomics: PIDE, Sep ’17

Heterodox and Radical Course on Microeconomics, currently being taught by Dr. Asad Zaman at PIDE in Fall Semester 2017. Course is for entering class of M.Phil and Ph.D. students.  Lectures are listed below with title and brief summar. Each lecture has a separate page with links to relevant materials and videos. Lectures are labeled AM01, AM02 etc.

AM01: Introductory Lecture.  This introductory lecture explains the fundamentals of the radical approach we plan to take in this course. The lecture has three major goals:

  1. To explain the radical difference between Western and Islamic concepts of knowledge, in particular between useful and useless knowledge.
  2. To provide student with courage and confidence to go against widely accepted ideas, being taught all over the world in leading universities and their followers.
  3. To teach students new ways of thinking about economic theories, as being an ideological and propaganda tool, in use for convincing people of the superiority of capitalism, in order to serve the interests of the wealthy.

AM02: S&D Models: This lecture follows the Hill & Myatt Anti-Textbook presentation on Supply and Demand. H&M set out the standard S&D model and its policy implications, as presented in conventional textbooks. Then they show that even though textbooks present the model as being universally applicable, it only works under conditions of perfect competition. These conditions rarely hold in real world markets. As a result, conclusions drawn from the S&D model are wrong and seriously misleading about real world effects of policies.

AM03: Monopoly: This lecture discusses monopolies in a very simple, easy to understand setting. It shows that all the policy implications based on S&D models are wrong, and the opposite lessons hold. That is, price ceiling and regulation can both provide good results (unlike the case of perfect competition). So, before making policies on basis of S&D theory, one should check if markets are monopolistic or competitive. In fact, empirical evidence shows that most markets are monopolistic — firms are price makers, not price takers. In focusing on S&D, instead of monopoly, textbooks are pursuing an ideological agenda.

AM04: Duopoly: This lecture continues analysis of duopoly model from previous lecture. Straightforward and simple analysis of an easy to understand model shows that firms cannot maximize because they cannot know the consequences of their actions, and hence cannot know which one is the optimal one. Similarly, calculation of equilibria does not give us information about outcomes of the game because what happens depends heavily on disequilibrium dynamics. Thus two fundamental methodological principles of economics are both obstacles to understanding real world economic systems.