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Rethinking Teaching of Basic Principles of Economics from a Sustainability Perspective

Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore 259772, Singapore
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Sustainability 2018, 10(5), 1486; https://doi.org/10.3390/su10051486
Received: 1 April 2018 / Revised: 2 May 2018 / Accepted: 4 May 2018 / Published: 9 May 2018
(This article belongs to the Special Issue Teaching and Learning for Sustainability)
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Abstract

In this paper, we posit that sustainability warrants explicit recognition in the teaching of basic principles of economics. The conventional exposition of conceptual and analytic frameworks in basic principles in almost all standard economics textbooks overlooks at least two basic flaws. The first of these concerns the collection of residual externalities that exist without being internalized in market transactions and hence fall outside the calculus of national income accounting. For example, not all energy resource prices capture the entirety of the damages inflicted on natural ecosystems. The cumulus of residual externalities threatens the feasibility of sustainability. The second flaw is the absence of sustainability as a necessary condition in the fundamental benchmark of perfect competition (PC). Sustainability, when explicitly introduced in the PC benchmark, results in significant changes to conceptual premises in economics. The most significant of such changes concerns the axiomatic differentiation between “goods” and “bads”. View Full-Text
Keywords: basic principles of economics; sustainability; residual externalities; perfect competition basic principles of economics; sustainability; residual externalities; perfect competition
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Chindarkar, N.; Thampapillai, D.J. Rethinking Teaching of Basic Principles of Economics from a Sustainability Perspective. Sustainability 2018, 10, 1486.

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