Behavioural Foundations of Economics

In recent years, work on what may broadly be described as "behavioural economics" has expanded, and is now attracting the attention of leading figures in economics, such as Kenneth Arrow. Much of the work, however, has concentrated on particular aspects of individual and aggregate behaviour. This work attempts to construct a unified framework, showing both how behavioural variables form the basis of economic activity, and how behavioural and economic variables interact to determine individual and aggregate behaviour. It also demonstrates how government expenditure may be endogenized, and finally, it demonstrates how individual and organizational decision making may be closely integrated.