Heterodox economics is a way of looking at the economy and its decisions which strays away from the mainstream approaches of neoclassical and Keynesian economics. Heterodox economists challenge established views, putting forth theories, assumptions, or methods that may differ from traditional approaches. Examples of such theories include Austrian business cycle theory (ABCT) and Minsky’s financial instability hypothesis.

The purpose of heterodox economics is to move beyond traditional economic thinking, providing alternative economic theories and methods which may broaden our understanding of economic processes. It looks for connections between economic, political and social forces and considers economics from an interdisciplinary perspective. Heterodox economists often focus on the real world impacts of economics, looking at the socio-cultural and institutional conditions in which economic processes take place.

For example, researchers applying heterodox economics may challenge how finance, culture, technology or power relations shape economic behaviour. It may also renegotiate the way in which economic models are constructed, creating models that better reflect the complexity of real-world economic systems.

Heterodox economics has grown in importance in the wake of the Great Recession, as mainstream theories were found wanting in answering some of the more important questions. It is increasingly seen as a valuable way of deepening our understanding of the economy, complementing mainstream viewpoints and providing alternative ways of looking at economics.