The feasibility of effectual ethics on the foundations of micro and macro issues of economics

Purpose – The purpose of this paper is to show the feasibility of effectual ethics on foundations of micro and macro issues of economics. Design/methodology/approach – In this paper, the library research method has been used to reflect some ideas about the necessity of changing the concept of economic rationality and modifying it from some famous economists. Findings – The entrance of ethics in economic discussions may affect them and suggests the new solutions or make considerable quantitative or qualitative changes to them. Research limitations/implications – If research is reported on in the paper this section must be completed and should include suggestions for future research and any identified limitations in the research process. Practical implications – It may be possible to objectify the extended rationality presumption by revising public culture and correcting it in such a way that ethical values and norm are institutionalized in society. Social implications – This research shows that if ethical values and norms beyond economic benefits are institutionalized in a society, economic outcomes seen in economic books may be otherwise. Originality/value – Comparative analysis of different effects of the two concepts of rationality – economic rationality and extended rationality – on life‐cycle hypothesis and efficiency of pollution tax shows new solutions or makes considerable quantitative or qualitative changes to them because of ethics.