The project examines the fundamental roles that values play in contemporary economics and articulates what this implies for how economic research is conducted, taught, and communicated. Drawing on insights from the philosophy of science, the project builds on Gunnar Myrdal’s classic thesis that values are both inevitable and indispensable throughout the research process.
More specifically, Joakim Sandberg will investigate the role of normative values in contemporary financial economics. Standard financial economic models typically assume that investors act solely to maximize risk-adjusted financial returns as passive price-takers. However, this assumption is increasingly challenged by developments in sustainable finance, where banks and institutional investors make allocation choices based on normative considerations and actively seek to influence corporate strategy.
Given that financial investments constitute a central engine in modern capitalism, clarifying the normative foundations of financial economics is essential. The project aims to demonstrate that a clearer understanding of underlying values leads to more robust research and better-informed policy recommendations.
“I see this project as a possibility for joint learning for both economists and philosophers. The point is not to criticize economics from an external standpoint, but instead to strengthen it by giving it a firmer foundation. Financial economics can have a lot to say about the role of banks and investors in the climate transition, but it needs to be more upfront about the types of values it rests on” says Joakim Sandberg.
About the Project
The project “Values in Economics” will run over two years and is funded by the Handelsbanken Research Foundations. It combines perspectives from philosophy, ethics, and financial economics to foster interdisciplinary dialogue and advance the theoretical foundations of sustainable finance.