Psychological and Social Aspects of Economic Transformation

As outlined in Chap. 1 , economics is part of the social sciencesEconomysocial sciences. Psychological and social aspectsEconomic transformationpsychological and social aspects should therefore be appropriately included in considerations of Economic Transformation. The sense of fairness and motivationPsychological and social aspectssense of fairness and motivation of employees influences the efficiency of the economy. The “Keeping up withPsychological and social aspectskeeping up with social comparative classes the JonesesKeeping up with the Joneses” effect shapes consumer behavior in many cases. In aggregate form, people’s expectations and assessments have a massive influence on economic development. It proves very difficult to incorporate these psychological or social aspects into economic models according to their importance. This, along with the overall complexity, is one reason why economic events often elude explanation and prediction using (mathematical) models.