The Behavioral Economics: An Influence of Psychological Factors on the Economic Growth

Abstract

Psychology as a branch of science could not take its place in the world for a long time. This fact says about a huge omission of a mass of intelligence by a human. However, the time overtook its own, and psychology became more significant for people and the economy in general. Being a science that would not exist without a human, it is impossible to omit its influence in it. Therefore, the main goal of this work is to consider the influence of behavioral mechanisms on decision-making by economic agents and, as a result, on economic growth. The theoretical part is closely interconnected with the practical part. This explains why the article does not have a clear separation between the two ones. Openings within the frame of behavioral economics embrace both the present and the past, which are aimed at showing both the fundamental nature of this knowledge and its undisputable relevance. These factors together represent a brief history of the development of this branch of knowledge. Through the prism of the main achievements of scientists of different years in the sphere of behavioral economics the irrational behavior of consumers was analyzed. This behavior was reflected in the examples, which showed simultaneously both: the main flaws of the classical macroeconomic models, and the importance of considering behavioral economics when analyzing aggregate demand and aggregate supply.

Latent Content Model of Economic Growth

“…This paper attempted to propound the LC model of economic growth which integrates both economic and non-economic variables/factors. Clearly, the economic growth (optimal) should be achieved by the application of both economic and economic factors (Zhang and Zhang, 2019;Vukolov and Orlova, 2020;Okulicz-Kozaryn et al 2018). The model explained both direct and indirect (mediation) effects of non-economic factors on either basic production input or economic growth.…”

“…Despite the fact there are adequate and concrete empirical evidences that traditional economic models that are fully incorporate only economic variables are ineffective to foster economic growth (Fehder et al 2018;Diener and Seligman, 2004;MacCulloch, 2008); there is no economic growth model that has been established to reflect this empirical reality. Moreover, the evidence is clear as the most of scholars agree that the incorporation of economic and noneconomic variables in economic growth models foster the economic growth (Zhang and Zhang, 2019;Vukolov and Orlova, 2020;Okulicz-Kozaryn et al 2018). Puzzlingly, there is no full attempt of building an economic growth model that integrates both economic and non economic factors.…”

Research on Influencing Factors of Consumers' Impulsive Consumption Behavior in China from the Perspective of Behavioral Economics

“…Leisure is an important part of human social consumption, and the diversified development of leisure activities provides more market opportunities for suppliers of various commodities and services, among which shopping leisure has become an important leisure activity for many consumers, especially impulsive buying has increasingly become a universal behavioral feature of consumers. Under the guidance of the existing behavioral economics theory, consumers' consumption behavior can be divided into two main modes, rational consumption behavior and irrational consumption behavior, due to the combined effects of many psychological and environmental factors, including personal wishes, market conditions, frame of reference and so on [1]. Consumers' impulse purchases account for a high proportion of retail sales in shopping malls and supermarkets, and the sales of some products even account for 80% of the total sales.…”