Answer to Question #39508 in Economics for liziwest65

Question

what are the weakness of neo classical theory in solving the classical theory?

Answer 1

Neoclassical economics has come under critique on the basis of its core ideologies, assumptions, and other matters.
Neoclassical economics is sometimes criticized for having a normative bias. In this view, it does not focus on explaining actual economies but instead on describing a "utopia" in which Pareto optimality applies. In the opinion of some developers of an alternative approach, the purpose of neoclassical economics is "to demonstrate the social optimality if the real world were to resemble the model", not "to explain the real world as observed empirically".