Is Economic Theory, Presented in Basic Academic Textbooks, Applicable to the Digital Economy?

Abstract

With the aim of improving modern methods for educating economists, the authors in this paper impose the following topics: What do we want to teach students, and do we teach them the right things? How transformative are our fundamental textbook bases to offer the new knowledge that the digital economy imposes? Bearing in mind previous questions, the aim of this paper is to highlight the gap that exists between economic theory and economic practice in terms of insufficient theoretical scope of the digital economy (DE) and its study, and DE’s increasing participation in global practice as an economy based on innovation and new technologies. In the analysis, the authors concentrate on two levels: (1) they analyse the specifics of DE and in that context, they evaluate the applicability of traditional economic theory; (2) they review the representation of DE in university textbooks. Based on the results, the authors conclude that DE possesses specific attributes, and it is necessary to include these as mandatory lessons in university textbooks on the level of basic studies. They suggest some areas for which economic theory should be better explained and supplemented in future research (proposing appropriate guidelines for future efforts in theoretical work). Moreover, through a systematic literature review, the authors approach 90 basic university textbooks in economics and by analysing their content, they prove that DE is not sufficiently represented in them. The results of the paper suggest that economics textbooks, and thus the curricula of basic studies, should be supplemented with chapters on the digital economy, which will affect the modernization and adequacy of theory with practice.

1. Introduction

The digital transformation has had significant effects in terms of improving methods and tools in the process of educating economists. At the same time, the fundamental changes that digital transformation has made in economic processes and the principles of functioning of the modern market, which represents a great challenge in the development of the economy as a science, are of enormous and primary importance. Therefore, in the context of improving education of modern economists (in the focus of their abilities, competencies, knowledge, and skills), one should understand, in theoretical and essential sense, the changes caused by digital transformation in the subject of their study, i.e., the principles of modern market functioning.

Professors of basic studies of economic, very often cannot offer students a complete answer to questions related to modern economics, which, thanks to new technologies, functions in a different way from what they can learn from textbooks. Modern economy based on innovations, knowledge, and technology, appears in the literature through different concepts and names within which similar or the same contents can be found. Thus, Atkinson and Ezell [1] talk about the Economy of Innovation, and for Gordon [2] it is a New Economy. Drucker [3] conceptually announced the New Economy as a Knowledge Economy, back in the 20th century. For Rifkin [4], the Network Economy is at the forefront. However, in recent years in practice, and even in theory, the term Digital Economy is increasingly mentioned [5].

Digital Economy refers to “an economy which functions primarily by means of digital technology, especially electronic transactions made using the internet” [6]. The Digital Economy is treated as a new, post-industrial global economy, based on internet transactions and advanced technology, i.e., as a global network of the economic activities based on information and communication technologies, or more simply, as economy based on digital technology [7]. Despite the fact that it is very present in a practical sense, the term DE is still shyly, in a categorical, conceptual, and essential sense, mentioned in journals and professional literature. Therefore, the aim of this article is to contribute to the affirmation of this type of economy.

During the COVID-19 pandemic, the importance and potential of the digital economy (DE) in the functioning of modern society came to the fore. For more than two decades, this economy has existed not only as a form of doing business but increasingly as a new form of market structure, rules, and principles. In this sense, a number of world-renowned authors with their works and books have significantly contributed to the conceptual and essential understanding of the DE [5,8,9,10,11]. Despite this, there are still a lot of unknowns associated with the DE.

From year to year, the number of companies participating in the DE has grown, as well as the total turnover generated by the DE globally, which reached 15.5% of the world GDP [12]. Moreover, it is estimated that the DE is growing seven times as fast as the rest of the economy [13]. Research made by Yousefi [14] confirms that developed countries benefit more from digitalization than underdeveloped ones. At the same time, the DE has more effect on growth and the overall economy than traditional statistics can identify because there is still no developed analytical and methodological tool that can capture all the effects that the DE achieves [15]. Therefore, in the conditions of the DE, GDP becomes a peripheral economic indicator [16]. This problem is at the centre of many research works and papers, which result in interesting proposals, which are, for example, directed to ‘new insights for measuring the digital economy which provide insight into integration of national accounts with product-oriented micro-analysis efforts’ [17,18].

There is a wide range of other approaches that try to identify and model the impact of the DE on modern society through the technological, economic, and social dimensions. In recent years, this spectrum has started from scientific papers in which, for example, the economic impact of digital technologies [19], and the significant impact of the DE on employment and creative knowledge jobs is especially noted [20]. Moreover, there are papers which, for example, analyse the impact of digital platforms on the sharing economy [21], and those which deal with the influence of the DE on the fundamental theoretical debates of the neoliberal approach [22].

In line with the previously explained significance and growth of DE, a question arises that is in the focus of this work: Is DE studied sufficiently in undergraduate economics study programmes and is there any need to study it at all (do we need to know it to guide its development), and do basic economics textbooks adequately cover this field? This is a question that concerns both professors and students of economics. So, there is awareness of the economic effects of digitalization (not only in practical, but also maybe in theoretical terms), but first year economics undergraduates still do not study DE to a sufficient extent. The key question: Is this statement correct, and what actions can we implement if so?

The sequence imposed by the research logic, relevant for testing this hypothesis, requires answers to the following research questions:

RQ1: Is DE so different from the traditional one that there is a need for a special study treatment? And,

RQ2: Is DE studied enough in basic studies of economics or is it sufficiently represented in basic economics textbooks?

There are papers and research in the literature showing that textbooks and curricula lag behind the most modern economic theories. Thus, Ferguson [23] identifies six areas: game-theoretic modelling, collective-action problems, information economics and contracting, social preference theory, conceptualizing rationality, and institutional theory. He offers suggestions for incorporating these into the undergraduate lessons at various levels. Madsen [24] investigates how the financial crisis is studied in textbooks on the principles of economics, and concludes that it is not adequately covered. Fike and Gwartney [25] analyse Public Choice, Market Failure, and Government Failure in Principles Textbooks, as topics that are not sufficiently covered. Some authors analysed the teaching practices in economics in existing literature and found that the lecture method continues being the preferred method of instruction in economics [26]. Economics textbooks, as Colander [27] concludes, are not easy to change, because they are linked to institutional structure, but any slight evolutionary shift is relevant.

It can be noticed that in the available literature, there are no papers discussing the inclusion of DE in basic economic textbooks in the provocative, but also constructive way, that the authors present in this paper.

In accordance with the previous, the following goals of the research paper have been recognized:

• Identify the specifics of the DE in terms of product character and production organization;
• Indicate changes in the market structure under the influence of the DE, as well as differences in the functioning of the digital market compared to the traditional market;
• Register some of the areas that are important for studying DE and suggest topics that should include a chapter on the digital economy in economics textbooks;
• Point out the importance of knowledge in the field of DE in the modern education of economists and their training to function in the conditions of increasing growth of the digital market;
• Create a model—a way to check the representation of the digital economy in the basic academic education of economists;
• Conduct a systematic review of the literature and make a selection of representative textbooks related to the basics of economics and through individual content analysis, check the presence of digital economy problems in them, i.e., whether basic university textbooks treat this area sufficiently.

The paper is organized as follows: in Section 2 the authors give a description of the methodology used in the paper, in Section 3 the results of the analysis are presented and through discussion, elaborated on the achievement of work goals, and Section 4, covers the conclusion with recommendations for further research.

2. Methodology

In search of an adequate answer to the research questions, two levels of qualitative analysis will be applied (Figure 1). The answer to the first question requires an analysis—a cross-section of the novelty in the essential sense that the DE brings with it, and whether this can be covered by traditional economic analysis. Therefore, the authors will first turn to scientific discussions on this topic in order to later focus on the specifics of the DE that require a new (different) analysis and approach to study. To achieve this, a descriptive approach was applied, directing it, as far as possible, into the context of theoretical analysis. According to Jasso [28], there are two main activities of theoretical analysis: (i) speculative thinking, whereby the theorist identifies the starting ideas for the postulates; and (ii) formal reasoning, whereby the theorist constructs the postulates and derives predictions from them. Using existing knowledge (views of well-known scientists and researchers, books, studies and articles on this topic), guided by the objectives of the research, the authors tried to follow the logic of this method: (i) that the assumption set be as short as possible, (ii) that the observable implications be as many and varied as possible, (iii) that the observable implications include phenomena or relationships not yet observed [28].

The answer to the second research question will be searched through a systematic literature review (SLR). Other methods are also available, primarily statistical methods based on the theory of the relevant sample (a representative sample of textbooks would be selected and their content analysed) as stated in Bourchtein [29] or in Bäuerle [30]. However, sample formation can be achieved by SLR, as selection and filtering leads to a quality sample based on which processing can lead to conclusions with a high degree of reliability. The SLR is used because it has been shown to be useful in other studies of a similar nature [31,32]. In its conceptual and methodological basis, SLR is conceived as a useful tool for such requirements. Therefore, the systematic review was initially approached [33,34], adjusted to the research of this paper, and it consists of the following steps: (1) defining appropriate questions for a review, (2) defining review protocol, (3) defining the textbooks’ selection criteria and process, (4) assessing the quality of textbooks, and (5) summarizing the results and interpreting the findings.

Review protocol that includes research questions, search strategy, book selection criteria and process, quality assessment, data extraction and synthesis are presented through Figure 1. Figure 1 shows that the review protocol from SLR is crossed with the results from the theoretical analysis which arises from the RQ1.

The Search Strategy and Textbooks’ Selection Criteria

In order to find out whether the chapter on DE is represented in the basic university economics textbooks, a search of several most famous publishers of university textbooks and educational online platforms was performed. A similar approach is used in the analysis of the economic textbooks that was conducted [35] and proved justified.

To collect the materials for basic economics textbooks, a search database of the following best publishers of academic textbooks was performed: (1) Cambridge University Press, (2) Oxford University Press, (3) Routledge of Taylor & Francis Group, (4) Princeton University Press, (5) Pearson, (6) McGraw Hill, (7) (8) WW Norton & Co., and (9) Wiley. The search was performed in February 2021.

This search has included both printed and electronic editions of textbooks. In addition, the Cengage Learning and Macmillan Learning educational platforms were included in the search. Finally, the results were also supplemented with an overview of basic economics textbooks used at the top ranked universities in the field of economics, as well as with available recommendations for the best economics textbooks.

To conduct the previously explained search, three types of filters were applied:

First, as a basis for the search, the authors used textbooks that include the following words in their titles: economics, basics of economics, principles of economics, and introduction to economics. As the topic of DE touches upon the field of micro and macroeconomics as well, it was taken into consideration the search based on the following terms: macroeconomics, microeconomics, principles of macroeconomics, principles of microeconomics, introduction to macroeconomics, and introduction to microeconomics. Through these 10 keywords in the title search, a wide selection of textbooks relevant to the analysis was created.

Second, given the goal of the search and the fact that the digital economy has been discussed much more frequently since 2010, the search was limited to textbooks published from 2010 to 2021.

Third, English editions of textbooks are considered as relevant. This can be treated as too rigid and restrictive a criterion, but a different analysis would be very complex and difficult to perform. This filter is imposed by selecting the publishers from the previous iteration.

Other phases and presentations of SLR results are given in Section 3.2.

3. Analysis and Results

3.1. The New Matters That the Digital Economy Brings in Practical and Theoretical Terms

In order for the DE to require special interpretation and study, i.e., an economic analysis which is different from the traditional lessons of economics, then it must be proved that in terms of the character of goods and products, as well as in terms of the structure and functioning of the market, it is significantly different. The specifics of the DE derive from the specificity of information as a commodity and the specificity of the network as a market. Can the existing economic theory (the one studied in economics studies) be applied to the DE?

Analysing the views of several authors on the need for a new economic analysis, it can be seen that dissatisfaction with the inappropriateness of economic theory began long before the web economy was in full swing; and not just from anyone. Thus, when receiving the Nobel Prize, North [36] expressed an unequivocal position on this issue, claiming that neoclassical economic theory is an inadequate tool for analysing and recommending policies that will encourage economic growth. Classical analysis deals with the functioning of the market, not the development of the market. With an attitude of how it is possible to prescribe policies when you do not understand how the economy develops, North announced a scientific revolution that was later joined by other well-known economists.

In this context, Romer’s [37] contribution via his treatment of technology and economic growth is unavoidable, in which he states that an economy based on information will exhibit different behaviours than an economy based on the production of goods and services.

Other authors similarly define, because they believe that, due to the specificity of DE, a different analysis and interpretation is required. Thus, Benkler [8] emphasizes that the emergence of the DE developed possibilities that directly arise from our economic understanding of information and culture as objects of production. At the same time, the networked environment enables a new modality of organizing production: radically decentralized, common, and unprofitable, based on the exchange of resources and results between widespread, loosely connected individuals who cooperate with each other without relying on market signals or managerial orders. Benkler calls this production ‘commons-based peer production’.

In this paper, the previous views will be tested with additional analysis that should confirm: (1) that a product in the DE is significantly different in an essential sense (i.e., has such a character and such features) so that its theoretical coverage would require a different approach or different economic analysis; (2) that the structure and way of functioning of the market has changed, so a fundamentally different approach is required when studying market phenomena and processes.

Information (ideas and knowledge) with its phenomenological nature represents the essence of the DE. As a product, it has a different content, appearance, different production, storage, distribution, and consumption. Information is an inexhaustible resource, its value increases by sharing (i.e., spending), it can be used by multiple consumers (better to say: millions of consumers) at the same time, and the costs of multiplication are negligible and minimal. In that context, Shapiro and Varian [11] cite three essential specifics of information as non-rival and non-exclusive goods: (1) information is costly to produce but cheap to reproduce, (2) information goods involve high fixed costs but low marginal costs, and (3) information is priced according to its value not to its cost. The above leads to the conclusion that the product (and also the raw material) in the DE is significantly different from what the same term refers to in the traditional economy. Is that sufficient to say that the DE requires a different analysis and theoretical treatment?

Information, as a raw material and a product, gains additional power thanks to technology. In the DE, thanks to the dynamic network, the structure and way of functioning of the market have changed. As previously stated, these changes are of such a nature that different rules of market functioning can be discussed, as well as the need for a new approach in the interpretation of economic phenomena and processes [8,38]. So here, to serve this analysis, is a short, mostly well-known, specification of these changes, simplified and systematized by individual segments of layered market relations [39].

The supply side of the market is being transformed by the emergence of a new form of products and services with a specific character and purpose. Digital, virtual, and imaginary products and services, produced and offered by digital, virtual producers, are appearing. At the same time, it is not only a question of the technological form, presentation, and distribution of these products, but also the character and the way of their consumption which determines the production process, relations in it, and the type and structure of the offer. This is accompanied by processes of specialization, concentration, and even monopolization of all segments of digital business.

The digital market is also a completely new demand side of the market. It is a global market for virtual customers, both individuals and companies, and both well-known and anonymous. This market is commensurate in size with the number of internet users. It is a market of well-informed, discerning, highly demanding consumers who take advantage of global competitiveness. This is why, in terms of information asymmetry, the responsibility of bidders who address this market has increased. The demand side of the market has its own rules and it, in the same manner as the digital supply side of market, does not know the determinants locally, nationally, and regionally.

Digitalization has revolutionized brokerage and sales channels. The abolition of intermediaries significantly accelerates turnover, and it occurs at a much lower cost, becomes more efficient, comfortable, and high-quality; a symbiosis is achieved through the maxims ‘the buyer goes to the seller, and the seller goes to the buyer’ and ‘the buyer becomes a worker at the seller/manufacturer’. Moreover, digitalization has caused changes in payment methods. Electronic money, and digital and mobile payments bring significant diameters to cash flows and global trade. Blockchain technology and cryptocurrencies impose different standards and transform the essence of the traditional institutional concept of a monetary economy.

Changes in management and organization are reflected in such a way that the emphasis is no longer on inherited power, hierarchy, and structure, but on dynamics, innovation, ideas, and flexibility. What once used to be a company is now a knowledge worker, as an individual, a generator of values, a production point in a networked economy. Therefore, the line of separation between management levels is dominantly erased, according to the principle that strategic management is experiencing a digital transformation, tactically; middle management is reduced or it disappears, and operational management is automated.

In the DE, the labour market is global, i.e., the workforce is a global resource, because in the digital business mode, all online workers are available for engagement to every company (or knowledge worker). As knowledge workers are networked, they do not need costs for premises and travel to work, etc., so there is a significant reduction in costs. Finally, in order to identify the effects of the DE (and working from home), a change to the standard division of the structure of the economy into three sectors is suggested by including a fourth sector, as well as the relativization of classical economic aggregates.

The fact that the digital market is networked and global, represents the biggest structural and conceptual leap compared to the standard notion of the traditional market. It can be said that everything that we presented was more a description of the phenomena of the DE and observed changes in the market structure than an essential economic analysis that would address issues such as: supply and demand, price, productivity, value creation, and competitiveness, etc. Therefore, in order to complete the previous approach, the differences (where they exist) in the basic categories and concepts between the traditional and the DE will be pointed out. It is not the intention to disavow and devalue such a sublime science as economics, but rather to point out the need for the special treatment and study of the DE.

The DE is not only an economy of scale, but also an economy of abundance. Marginal costs tend towards zero, as Rifkin [38] states, due to the technological platform, growth of competitiveness, productivity, and efficiency. Moreover, as they would add, because everyone loves to receive something for free. The dynamic network is imposing an economy of free products. Thus, an army of consumers, which is constantly growing, by using free products and services, imposes a different logic of economic processes and legality. We are used to the fact that value in the traditional economy, i.e., the price of goods, was predominantly associated with scarcity. In the first lessons of economics, we are taught that economics is the science of the rational distribution of scarce resources [40]. In contrast, the DE is characterized by abundance [10]. The economics of abundance is different from the economics of scarcity, so it cannot be fully identified with the scale economy, as it is interpreted in the framework of traditional analysis. It should be borne in mind that the new economy is the economy of sharing as well, and that all its logic and the process of functioning as a production model imposes CBPP (commons-based peer production) [8]. Furthermore, the DE’s pricing policy should be interpreted differently from the supply–demand relationship [10], so standard equilibrium models cannot be applied.

Value in the DE is created by the human brain, computing resources, and network systems that unite and connect them. What is new here then, if (so far) analysis of the traditional economy, in addition to physical capital and natural resources, has also identified human capital and technological knowledge as a source of growth? The novelty is that the human brain in the DE is a direct productive force. As we have stated, networking and technology have helped to exploit this resource to unprecedented proportions. The human imagination as an inexhaustible reservoir of innovation becomes an important factor of productivity, competitiveness, and thus growth, which means that not only is productivity based on technology important, but productivity based on knowledge is also important. At the same time, the issue of registration and coverage of the contribution of the intangible and virtual economy and its effects is still open.

Divisible digital products and the economics of their creation, distribution, and consumption impose a different nature of exchange and market relations. That market does not strive for perfect competition but for monopolization [10], or as Wang and Zang [41] state, instead of competition, the internet creates a system of winning companies, stating that: ‘The Internet is changing the shape of the demand curve in favour of targeted products.’ That is—the superstar effect dominates the long-tail effect. According to the ‘winner takes all’ theory in the initial phase of using the internet, competition can be fierce with a large number of participants, but later a few large companies, or only one, crystallize out and the market space for others narrows dramatically.

It can be concluded that the digital market is both global and networked, based on the different interactions of its constituents, in the sense of its organization, communication, and interest. Therefore, the authors conclude that the structure and principles of the functioning of the digital market are a necessary lesson in the first years of undergraduate studies in the process of educating future economists.

Based on the previous analysis, primarily due to the specifics and different functioning, it should be considered extremely useful to pay as much attention as possible to the study of the DE within undergraduate studies of economics. Emphasis of the differences brought by the DE, as well as the need for special treatment or even different economic analysis, is unavoidable in order to be able to give a quality interpretation of the DE. At the same time, the need to study the issues—the principles and laws according to which the DE operates separately—arises not only because of their diversity, but also because of the growing importance and participation of the DE in the overall economy. Statistics suggest that the DE is becoming an increasingly dominant form of economic activity day by day. It is estimated that by 2025, the DE will account for about 25% of global GDP [42]. What is more, as already seen, the expert public agrees that the DE has more effects on growth than the official statistics record and the traditional economic indicators suggest [15].

Finally, in this context there are three, and even many more (some were highlighted earlier), interesting topics that confirm the need for additional discussion and the need for special treatment of DE. Following the previous analysis, these topics will be shortly discussed here:

• Production and production costs in the DE have a different economic nature than in the traditional economy. The question is whether the models—production functions and cost theories (total cost curves and marginal cost curves)—from the analysis of the traditional economy can be applied?

The basis of traditional microeconomics primarily includes the theory of the firm that is founded on the production function and profit-maximizing theory including well-known cost curves (average total cost curve—ATC, marginal cost curve—MC, and average variable cost curve—AVC). These models and theories are based on some traditional assumptions. In this way, the production function is the relationship between the input elements for production and the quantity of output obtained. The ATC is the ratio of total cost and total output, and it is U shaped. In other words, there are two opposing effects of increasing output, the spreading effect, and the diminishing return effect. Further, the MC becomes upward sloping because of diminishing returns and the ATC increases because of increasing marginal cost (e.g., production of automobiles).

In the digital economy, as we stressed earlier, we have information as non-exclusive, non-rivalrous and inexhaustible good. The nature of its consumption is different (it is not destroyed, but replicated by consumption). In this way, a great challenge for traditional microeconomics is represented by marginal costs, because in the digital economy they weigh or are equal to zero. For instance, although the fixed costs of producing digital services are high, its marginal costs and distribution costs are almost non-existent. Therefore, in this part, additional interpretations, or special treatment of this phenomenon in the digital economy are necessary.

2.

The supply–demand ratio in the DE does not determine the price level, so when does, therefore, the equilibrium model (equilibrium price) apply?

As is known in the traditional economic theory, the relationship between supply and demand determines the price, and the equilibrium model implies the existence of a perfect competition market where firms sell standardized products, where firms are price takers, where new players have free access to the market, and where buyers and sellers have full information.

The digital market does not have these features because, under the dominant influence of digital platforms, it tends to monopoly. However, at the same time, unlike under traditional monopoly, a significant number of products and services in the digital market are available for costumers for free. Therefore, it can be said that the relationship between supply and demand does not determine the price, so the question of the equilibrium model is also open.

Yet, these “monopolies” earn enormous profits providing services at no cost, which additionally supports the claim that DE requires a special treatment. It can be argued that network users pay for free products with their own work, but then this implies a need for a new model or theory that will suggest an approach to measure the value (cost) of the work conducted by these users, and the benefits that the network (and platform owners) gain from it.

Existing statistical measures and econometric models have still not fully developed instruments that could offer quality answers to these questions. The economists are aware that there are various exceptions to the theory known as “market failures”, but these are the subject of special studies and analysis in theory and in economics textbooks. Our goal is to check whether this is the case with DE.

3.

Why productivity based on knowledge and the network contributes more to economic growth than productivity based on work and equipment?

The issue of productivity and sources of productivity growth are inseparably linked to issues of value, and it is part of all economic debates. The traditional economy has been characterized in this respect by various theories such as the theory of fair (just) price, physiocratic theory of value, labour theory of value, the theory of production costs and subjective theory of value. It is true that productivity based on traditional work and equipment also implied a significant role of knowledge.

However, DE expresses a different treatment of value in relation to all previous theories because in DE, value is created in a significantly different process. Value in DE is created by the human brain as a direct productive force together with innovation, and the computing resources and network systems that unite and connects them [39]. The best confirmation of the premise that the productivity on which the digital economy is based contributes more to economic growth is seen in the fact that digital giants (Google, Amazon, and Facebook, etc.) have experienced exponential growth and huge market capitalization with a relatively small number of employees and in just a few years thanks to innovation, knowledge, and network. Companies in the traditional economy needed decades to reach a much smaller capitalization with a huge number of employees (General Motors and General Electric, etc.). Therefore, we conclude that the phenomena of DE in terms of productivity must be further explained and studied by supplemented economic analyses.

Each of these topics is a suitable testing ground for new research in which the use of empirical data, and economic and econometric models could confirm or reject these hypotheses and thus further contribute to attitudes about the need for the special treatment of the DE.

As a summary of this analysis of the specifics of DE, it can be concluded that in basic university textbooks of economics, it would be desirable to have a separate chapter dealing with DE, which would cover topics such as: specifics of digital products, DE and different treatment of basic economic categories (costs, price, labour, value, productivity and competitiveness), structure and functioning of the digital market, creative destruction and disruption innovation, network externals, network economy and digital platform economy (monopolization and regulation), etc.

3.2. Results of Systematic Textbooks Review

3.2.1. Textbooks’ Selection Criteria

The

Table 1. SLR Process.

Search Library	The Best Publishers of Academic Textbooks
Keywords	economics, basics of economics, principles of economics, introduction to economics. As the topic of DE touches upon the field of micro and macroeconomics as well, we also took into consideration the search based on the following terms: macroeconomics, microeconomics, principles of macroeconomics, principles of microeconomics, introduction to macroeconomics, introduction to microeconomics
Period	2010–2021
Level of study	First year of undergraduate studies
Language	English
Exclusion	Older editions of the same authors
Total search	1091
Selected and reviewed	90
Search period	February 2021

shows the results of SLR process based on the set of criteria, listed in the methodology, by publishers: Cambridge University Press—63; Oxford University Press —155; Routledge of Taylor & Francis Group—399; Princeton University Press—140; Pearson—34; McGraw Hill—84; Macmillan Learning—50; Cengage Learning—111; WW Norton & Co.—43; and Wiley—12; which is 1091 textbooks in total.

Following research and analysis, the old editions of the same textbooks also appeared in the reports and they were eliminated. By carrying out a detailed analysis, the textbooks used in postgraduate studies were also excluded because this research paper covers only textbooks used in the first year of undergraduate studies. Thus, the number of textbooks that are interesting for analysis by publishers was reduced to 90 and the analysis of their content and inclusion of DE was presented in

Table 2. Textbooks from the best Universities of Economics (according to Chloe Lane, “Top Universities for Economics in 2020”, 4 March 2020, https://www.topuniversities.com/university-rankings-articles/university-subject-rankings/top-universities-economics-2020, accessed on 20 April 2020).

University 1	Title of the Textbook	Author
Harvard University	Principles of Economics	N. Gregory Mankiw 2
Massachusetts Institute of Technology (MIT)	Macroeconomics	Olivier Blanchard [44]
Stanford University	Principles of Economics	John B. Taylor and Akila Weerapana [45]
University of California, Berkeley (UCB)	Macroeconomics as a Second Language	Martha L. Olney [46]
The London School of Economics and Political Science (LSE)	Microeconomics Macroeconomics Macroeconomics	Acemoglu, Laibson and List N. Gregory Mankiw O Blanchard, D R Jonson
Princeton University	Economics Principles and Policy	William Baumol, Alan Blinder, Johan L. Solow
University of Oxford	Economics Macroeconomics	R. Lipsey and A. Chrystal M. Burda and C. Wyplosz
University of Cambridge	Macroeconomics for Business The Manager’s Way of Understanding the Global Economy	Lawrence S. Davidson Andreas Hauskrecht, Jürgen von Hagen

Remarks: ¹ We included the University of Oxford and University of Cambridge to have more non-US universities represented in this table (although they are ranked 9th and 10th in this ranking). ² It has been estimated that around 4 million copies of this textbook are sold, and that of all the basic economics textbooks at the global level, the Mankiw principles account for 25%. (Samuelson, 2019).

. The authors believe that the representativeness of publishers guarantees the quality of selected textbooks. In addition, for the validity of this analysis, reference to the (some) relevant textbooks used in the top ranked universities in the field of economics was made (Table 2) and it was found that they were all covered with the previous result of the SLR (

Table A1. Textbook analysis [60,61,62,63,64,65,66,67,68,69,70,71,72,73,74,75,76,77,78,79,80,81,82,83,84,85,86,87,88,89,90,91,92,93,94,95,96,97,98,99,100,101,102,103,104,105,106,107,108,109,110,111,112,113,114,115,116,117,118,119,120,121,122,123,124,125,126,127,128,129,130,131,132,133,134,135,136,137,138,139,140,141,142].

Publisher	Title of the Textbook	Author	Year of Publication	Coverage of the DE	Converging Topics 1
Cambridge University Press	Microeconomics for MBAs—The Economic Way of Thinking for Managers (3rd edition)	Richard B. McKenzie, Dwight R. Lee	2020	Consumer choice and demands in traditional and network markets, Software networks	/
	Applied Intermediate Macroeconomics	Kevin D. Hoover	2015	/	/
	Macroeconomics for Business—The Manager’s Way of Understanding the Global Economy	Lawrence S. Davidson Andreas Hauskrecht, Jürgen von Hagen	2020	/	/
Oxford University Press	Economics—A Primer	Simon Hayley, Alec Chrystal	2018	/	/
	Economics (14th edition)	Richard Lipsey, Alec Chrystal	2020	/	Costs in the very long run: endogenous technical change. new technologies, the information and communication technology (ICT) revolution
	Economics	David King	2012	/	Public goods, The problem with common resources, Asymmetric information
	The Econom—Economics for a Changing World	Samuel Bowles, Wendy Carlin, Margaret Stevens The CORE Team	2017	Innovation, information and the networked economy	/
	Principles of Macroeconomics (3rd edition)	Soumyen Sikdar	2020	/	/
	Lectures in Macroeconomics—A Capitalist Economy Without Unemployment	Kazimierz Łaski, Edited by Jerzy Osiatyński and Jan Toporowski	2019	/	/
	Foundations of Economics (5th edition)	Andrew Gillespie	2019	/	/
	Economics for BusinessTop of FormBottom of Form	Andrew Gillespie	2019	/	Public goods, Asymmetric information
	Microeconomics—Principles and Analysis (2nd edition)	Frank Cowell	2018	/	Information
	Macroeconomics—a European Text (7th edition)	Michael Burda and Charles Wyplosz	2017	/	/
	Microeconomics: A Very Short Introduction	Avinash Dixit	2014	/	Information asymmetries
Routledge	Principles of Economics in Context (2nd edition)	Neva Goodwin, Jonathan M. Harris, Julie A. Nelson, Brian Roach, Mariano Torras	2020	/	/
	Principles of Economics in a Nutshell (1st edition)	Lorenzo Garbo, Dorene Isenberg, Nicholas Reksten	2020	/	Market failures: public goods and externalities
	Principles of Macroeconomics Activist vs. Austerity Policies (2nd edition)	Howard J. Sherman, Michael A. Meeropol, Paul D. Sherman	2020	/	/
	Foundations of Real-World Economics: What Every Economics Student Needs to Know	John Komlos	2020	/	/
	Economics: The Basics, (3rd edition)	Tony Cleaver	2015	/	/
	Essentials of Economics in Context (1st edition)	Neva Goodwin, Jonathan M. Harris, Pratistha Joshi Rajkarnikar, Brian Roach, Tim B. Thornton	2020	/	/
	Macroeconomics (1st edition)	Robert J. Rossana	2020	/	/
	Macroeconomics in Context, A European Perspective	Sebastian Dullien, Neva Goodwin, Jonathan M. Harris, Julie A. Nelson, Brian Roach, Mariano Torras	2018	/	/
	Microeconomic Principles and Problems—A Pluralist Introduction (1st edition)	Geoffrey Schneider	2019	/	Public Goods and Services
	Essentials of Microeconomics (1st edition)	Bonnie Nguyen, Andrew Wait	2016	/	/
	Microeconomics, A Global Text (1st edition)	Judy Whitehead	2014	/	/
Princeton University Press	Economics in Two Lessons—Why Markets Work So Well, and Why They Can Fail So Badly	John Quiggin	2019	/	Time, Information, and Uncertainty Market Failure: Information, Uncertainty, and Financial Markets
	Microeconomics for Managers (2nd edition)	David M. Kreps	2019	/	Uncertainty and Information
	Microeconomic Foundations I: Choice and Competitive Markets	David M. Kreps	2013	/	/
Pearson	Economic Way of Thinking (13th edition)	Paul L. Heyne, Peter J. Boettke, David L. Prychitko	2014	/	/
	Essential Foundations of Economics (9th edition)	Robin Bade, Michael Parkin	2021	/	/
	Essentials of Economics (7th edition)	Glenn Hubbard, Anthony Patrick O’Brien	2021	/	Technology, Production and Cost
	Survey of Economics: Principles, Applications, and Tools (8th edition)	Arthur O’Sullivan, Steven Sheffrin, Stephen Perez	2020	/	Production Technology and Cost
	Macroeconomics (10th edition)	Andrew B. Abel, Ben S. Bernanke, Dean Croushore	2020	/	/
	Macroeconomics: A European Perspective (3rd edition)	Oliver Blanchard, Prof Alessia Amighini, Prof Francesco Giavazzi	2017	/	Technological Progress and Growth
	Macroeconomics: Policy and Practice (2nd edition)	Freeric S. Mishkin	2015	/	Drivers of Growth: Technology, Policy, and Institutions
	Economics of Money, Banking and Financial Markets (What’s New in Economics)	Freeric S. Mishkin	2016	/	/
	Macroeconomics (2nd edition)	Glenn Hubbard, Anthony Patric O’Brien, Matthew P. Rafferty	2014	/	/
	Macroeconomics: Theories and Policies (10th edition)	Richard Froyen	2013	/	/
	Macroeconomics (12th edition)	Robert J. Gordon	2012	/	Human Capital and Technology
	Microeconomics (3rd edition)	Daron Acemoglu, David Laibson, John List	2021	The Economics of Information	/
	Economics Today: The Micro View (20th edition)	Roger LeRoy Miller	2021	/	/
	Foundations of Microeconomics (9th edition)	Robin Bade, Michael Parkin	2021	/	/
	Principles of Microeconomics (13th edition)	Karl E. Case, Ray C. Fair, Sharon E. Oster,	2020	/	Externalities, Public Goods, and Common Resource
	Microeconomics: Principles, Applications and Tools (10th edition)	Arthur O’Sullivan, Steven Sheffrin, Stephen Perez	2020	/	Production Technology and Cost
	Economics, Global edition (2nd edition)	Acemoglu, Laibson, and List	2019	The Economics of Information	/
	Principles of Economics (13th edition)	Karl E. Case, Ray C. Fair, Sharon E. Oster	2020	/	Externalities, Public Goods, and Common Resource
McGraw Hill	Economics (22nd edition)	Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn	2020	/	Technology, R&D, and Efficiency
	Issues in Economics Today (9th edition)	Robert Guell	2020	/	/
	Economics, The Basics (4th edition)	Mike Mandel	2020	/	The Nature of Technological Change
	Economics (3rd edition)	Dean S. Karlan, Jonathan J. Morduch	2020	/	Information
	Economics (12th edition)	Stephen L. Slavin	2019	Economies of Platform	/
	Essentials of Economics	Bradley R. Schiller, Karen Gebhardt	2019	/	/
	Economics (11th edition)	David C. Colander	2019	Real-World Competition and Technology	/
	Economics (11th edition) eBook	David Begg, Gianluigi Vernasca, Stanley Fischer, Rudiger Dornbusch	2014	/	/
	Principles of Economics (3rd edition)	Moore McDowell, Rodney Thom, Ivan Pastine, Robert H. Frank, Ben Bernanke	2012	The economics of information	/
	Macroeconomics (11th edition)	David C. Colander	2019	/	/
	Principles of Microeconomics (7th edition)	Robert H. Frank, Ben Bernanke, Kate Antonovics, Ori Heffetz	2018	The economics of information	/
	Principles of Economics (7th edition)	Robert H. Frank, Ben Bernanke, Kate Antonovics, Ori Heffetz	2018	The economics of information	/
	The Economy Today (15th edition)	Bradley R. Schiller, Karen Gebhardt	2018	/	/
	Economics: Principles and Practices	Gary E. Clayton	2012	/	/
Cengage Learning	Essentials of Economics (9th edition)	N. Gregory Mankiw	2020	/	/
	Principles of Economics (9th edition)	N. Gregory Mankiw	2020	/	Asymmetric Information
	Economics (5th edition)	Gregory N. Mankiw, Mark P. Taylor	2020	/	Information and behavioural economics
	Survey of Economics (10th edition)	Irvin B. Tucker	2019	/	/
	Business Economics (3rd edition)	Gregory N. Mankiw, Mark P. Taylor, Andrew Ashwin	2019	/	Asymmetric Information
	Economics for Today (10th edition)	Irvin B. Tucker	2019	/	/
	Economics (13th edition)	Roger A. Arnold	2019	/	/
	Economics (10th edition)	William Boyes, Michael Melvin	2016	/	/
	Basic Economics (International edition)	Frank V. Mastrianna	2013	/	/
	Economics Principles & Policy (14th edition)	William J. Baumol, Alan S. Blinder, John L. Solow	2020	The Economy Today (Artificial Intelligence Leave No Work for Humans to Do? Are Uber and AirBnB the Markets of the Future? Is the “Gig” Economy the Future of Work?)	/
	Macroeconomics for Today (10th edition)	Irvin B. Tucker	2019	/	/
	Microeconomics for Today (10th edition)	Irvin B. Tucker	2019	/	/
Macmillan Learning	Economics (5th edition)	Paul Krugman, Robin Wells	2018	/	/
	Essentials of Economics (5th edition)	Paul Krugman, Robin Wells	2020	/	Positive Externalities in Today’s Economy
	Principles of Economics (1st edition)	Betsey Stevenson, Justin Wolfers	2020	/	/
	Economic Principles (1st edition)	Stephen Rubb, Scott Sumner	2019	/	Markets with Adverse Selection and Asymmetric Information
	Modern Principles of Economics (5th edition)	Tyler Cowen, Alex Tabarrok	2021	/	/
	Economics: Principles for a Changing World (5th edition)	Eric Chiang	2020	/	/
W.W. Norton & Co.	Principles of Economics (3rd edition) E-Book and Learning Tools	Dirk Mateer, Lee Coppock	2020/21	/	/
	Principles of Macroeconomics (3rd edition)	Lee Coppock, Dirk Mateer	2020	/	/
	Principles of Microeconomics	Dirk Mateer, Lee Coppock	2020	/	/
	Intermediate Microeconomics, A Modern Approach (Ninth International Student EditionNinth International Student EditionNinth International Student Edition9th international student edition)	Hal Varian	WW Norton & Co222020	Information technology (Systems Competition, LockIn, Model of Competition with Switching Costs, Markets with Network Externalities)	/
	Macroeconomics (4th edition)	Charles I. Jones	2016	/	/
Wiley	Economics: Theory and Practice (11th edition)	Patrick J. Welch, Gerry F. Welch	2016	/	/
	Microeconomics as a Second Language (e-book)	Martha L. Olney	2011	/	/
	Macroeconomics as a Second Language (e-book)	Martha L. Olney	2011	/	/
	Macroeconomics: Understanding the Global Economy (3rd edition)	David Miles, Andrew Scott, Francis Breedon	2012	/	Total Factor Productivity, Human Capital and Technology
	Microeconomics (6th edition)	David Besanko, Ronald Braeutigam	2020	/	/
For Dummies	Economics For Dummies	Sean Masaki Flynn	2018	/	Asymmetric Information and Public Goods
Worth Publishers	Principles of economics	Stephen Buckles et al.	2012	/	/
FlatWorld	Principles of Economics	John B. Taylor and Akila Weerapana	2017	/	Informational Efficiency

¹ The topics we have identified here as converging can be found in almost all economic textbooks. Here, for the purposes of our analysis, we have registered only those textbooks where they are treated as separate units or chapters.

). Moreover, the research included the lists of recommendations of the best economics textbooks (

Table 3. The best economics textbooks according to Professor Conquer, “The Best Economics Textbooks of 2021”, 2 January 2021, https://www.conqueryourexam.com/best-economics-textbooks/, accessed on 18 February 2021.

Title of the Textbook	Author
Basic Economics	Thomas Sowell, Basic book 2000
Principles of Economics	N. Gregory Mankiw
Economics Today: The Micro View	Roger LeRoy Miller
Economics of Money, Banking and Financial Markets (What’s New in Economics)	Frederic Mishkin
Economics: Principles and Practices	McGraw Hill authors
Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics	Henry Hazlitt Published 1946
Freakonomics: A Rogue Economist Explores the Hidden Side of Everything	Steven D. Levitt Published 2009
Economics For Dummies	S. M. Flynn

and

Table 4. The best economics textbooks according to Harleen Dhami, “Economics Textbooks: Which is The Best”, 3 September 2019, https://tophat.com/blog/economics-textbook/ (accessed on 20 April 2020).

Title of the Textbook	Author
Principles of economics (Up to date e-book)	Stephen Buckles (Vanderbilt University)
Principles of Economics	N. Gregory Mankiw
Principles of Economics	Case, Fair and Oster
Principles of Microeconomics	Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn

) and they were analysed according to the set of criteria of the given search (basic textbook and year of publication, etc.). Finally, the assessments of analysts [43] about the prevalence of individual textbooks at the global level was taken into consideration, so that it can be ultimately concluded how much studying material of the digital economy is actually available.

By analysing the contents of these textbooks, the authors found that they deal with issues related to basic economic categories and issues arising from them in an extremely professional, interesting, and popular way. Having in mind the fact that the dominant part of the economy still functions within the regime and framework of the real, traditional economy from the 20th century, it is quite natural that textbooks on the basic economic disciplines at universities are focused on studying the principles and laws of that economy. However, it cannot be said that DE-related issues are not dealt with at all.

3.2.2. Summarizing the Results and Interpreting the Findings

The analysis led to the conclusion that in a significant number of textbooks (29) there are chapters or sections that deal with asymmetric information, technological progress, externalities, public goods, and common resource etc. However, they are associated with DE in a broader context. It is probable that these topics are permeated within other chapters and other textbooks, but they are standard lessons from traditional economics textbooks, so they were not highlighted.

This is due to a number of specifics that DE has in relation to these categories, as well as in relation to the traditional economy. It was clarified in response to the first research question.

Thus, out of the total number of analysed textbooks, only 11 have chapters and sections partly dedicated to the digital economy. These are individual units that are close to issues from DE topics, such as: the economics of information [47,48,49,50,51], consumer choice and demands in traditional and network markets [52], innovation, information and the networked economy [53], economies of platform [54], the economy today [55], competitiveness in the IT industry and the market of the network of externals [56] and real-world competition and technology [57].

However, in these cases, the consideration is limited to specific dimensions related to the specifics of the information economy and competitiveness in the information technology sector. However, as already shown in a previous analysis, directly or indirectly, the information economy is not the same as the DE that further crystallizes out with the network economy as a generator of different market relations. Therefore, it can be noticed that the textbooks do not specifically deal with digital products, digital markets, and the work of digital companies, although, as stated, their nature is significantly different. In particular, although the issues of the functioning of the digital market (supply, demand, prices and costs, value creation, and monopolies, etc.) are new and different, they are not sufficiently addressed in the basic textbooks of economics. It is probable that the reason why these topics do not exist can be found in the fact that many issues related to the DE phenomenon have not yet been sufficiently researched or studied. However, due to its presence and growing importance, we consider it necessary for the scientific, professional, and research public to address this issue.

The fact is that in the later years of economics courses, there are specialized programs related to blockchain and cryptocurrency, etc. Although, the authors believe that it is important to study the new DE in the first year of study. Introductory economics education within undergraduate studies is very important for later success [58]. Equally, textbooks must follow the economic reality that students face and live in [24]. Even professors of economics must predominantly be committed to this goal [59].

It should not be forgotten that the students who are currently studying belong to the so-called Net Generation. After graduation, they will be working in an environment that will be much more coloured by the new DE. Here is one bitter observation on this topic: which economic science and business philosophy ensured the success of the digital giants, that is, of digital platform owners—was it from traditional economics textbooks? No! The fact is that the founders and owners of these companies were generally not economists and did not study Marshall, Keynes, or Friedman. The fact is that without any formal economic knowledge, they have achieved incredible success. Or so we think… They were not burdened by the traditional economy and its rules, they were only interested in the new economy whose rules they created themselves. Based on this, it would be too bold to say that one does not have to know traditional economic analysis to understand the DE. However, everyone needs to supplement their basic economic knowledge with knowledge from the DE.

It is not the intention of this research paper to make any final judgments in this type of discussion, because as in the ‘old’ economic science there was no agreement on the basic models and theories, so it should not be expected that in the DE there will be a unique dogma within the chosen paradigm.

At the same time, the shaped knowledge that, so far, has been related to the DE can be presented in all lessons, or else the DE can be presented as a separate area or a separate chapter. The authors do not want to go into details here, because the goal is to highlight the need, but not to give a complete explication of the lessons and program units, because these are reputable authors and respectable textbooks that have been analysed.

Before concluding, it should be pointed out that this analysis has made a significant contribution to the further treatment of this issue, although the authors are aware that economics textbooks are slowly changing [29]. Ultimately, the view presented in this paper can be understood within the Colander’s dilemma “Why economics textbooks should, but don’t, and won’t, change” [27].

4. Conclusions

In this paper, the gap that exists between economic theory, presented in economic textbooks, and economic practice, which is reflected in the insufficient scope and study of DE, was highlighted. The authors analysed the specifics of DE and assessed that it, primarily as an economics of innovation and new technologies, has enough specifics and that its principles of functioning must be specifically explained within the basic lessons of economic theory.

Based on the analysis of 90 representative basic university textbooks of economics, the authors proved that the issue of DE is not sufficiently represented in them. In that sense, the authors, based on the results of the research, suggest topics and lessons that, in terms of studying of DE, should be included in the basic university economic textbooks.

Limitations of this paper, represent, at the same time, a strong message for future research and they focus on two levels. On the first level, in addition to the analysis of textbooks, according to a similar methodology, an analysis and review of the curriculum and syllabus of teaching disciplines in the initial years of economics studies should be made. This would improve the research knowledge on this topic and validate the results derived from this paper. On the second level, to test the applicability of existing, traditional models and theories, individually, on all specifics of the digital economy. If possible, to suggest upgrading them or creating new models and theories. This could further confirm or reject the hypothesis of the need for a special economic analysis for the digital economy. In that sense, this paper suggests some areas that should be the focus of future research, such as: structure and functioning of the digital market (supply, demand, prices and costs, productivity, and value creation, etc.); network economy and digital platform economy (monopolization and regulation); and marginal cost theories of digital products, etc.