NEW INSTITUTIONAL ECONOMICS

Abstract

Recently, New Institutional Economics has ensured its own privileged place in literature as an interdisciplinary approach that contributes both empirically and theoretically to economics literature and in that sense, that gives an opportunity to the stranded Orthodoxy perception. The approach has achieved to introduce a different methodological perspective with a new terminology such as transaction costs, bounded rationality, property rights, incomplete contracts, and opportunity over rules, institutions, and organizations. Thus, by bringing the institutional foundations of economic activity to the center of the positive research, it has become the most dynamic and vital discipline in economics. As of today, New Institutional Economics is exactly at the center of the current economic agenda by criticizing Neoclassical assumptions and instead, generating realistic theories, but not rejecting prevailing economic wisdom.