An advantage of teaching undergraduate students as I simultaneously work on my graduate work is I get to go through both undergrad textbooks and graduate books at the same time. Currently, I’ve been working my way through Cowen and Tabarrok’s Principles of Economics for my undergraduate class and George Stigler’s Theory of Price and Donald Watson’s Price Theory and Its Uses for my research.
We often hear, primarily by people who dislike the implications of Econ 101 models, that Econ 101 is too simplistic, too unrealistic for the real world. They’ll point to other economic models that better conform to their desired views (eg, the monopsony model for minimum wage). “We can’t rely on Econ 101! It’s just too simple!”
But what’s interesting to me is that going through these upper-level texts (Stigler is a high-Masters, low-PhD text), one sees they are not fundamentally different from the undergrad texts. This holds in other texts, too, such as David Kreps’ Microeconomic Foundations. There may be more math to formalize the models, but the intuition remains the same; the implications remain the same.
Basic supply and demand analysis gets us a very long way. It is not complete, of course. No theory ever is. But supply and demand is fundamental. Seeking to overthrow the foundations will not necessarily lead to a more coherent theory.