ABSTRACT

John Maynard Keynes introduced two meso level concepts: the fallacy of composition and herd behaviour. The fallacy of composition explains why the macro level is only partially an aggregation of micro level units. In behavioural economics, it has been referred to as irrational behaviour, or irrational exuberance. In institutional economics, the meso level is where most institutions emerge, consolidate, are challenged, and change or are replaced entirely by new institutions. Social economics stands out for its analysis of the economy as a social and open system. In stratification economics, the focus of analysis “is group-based inequality and the social economic hierarchies associated with individuals’ identification with social groups, allegiance to which is manifested in asymmetries between their pro-own group and anti-other group behaviours”. In social economics, all three are still considered key values influencing the behaviour of individuals, households, firms, and the state.