Affiliation of faculty with different schools of thought in economics and their teaching techniques often pose challenges on each other. Every year, the annual conference of the American Economic Association dedicates several sessions on the teaching of economics to under and postgrad students in American universities and beyond. Last week, I had a very interesting conversation in two economics departments at LUMS and IBA. The faculty was able to make a clear distinction between two camps within both departments: first, those who rely more on rational choice theory and the second group of economists more in favour of the behavioural approach in the teaching of economics. The first group, the neoclassical economists, emphasise a lot on theory. Their main argument is that the theory strips away minor and unnecessary information and provides an opportunity to focus on fundamental relationships between fewer sets of variables. The fewer sets of variables help design policy. Most of the time, they give high weights to optimisation and establishing equilibrium in their models. The second group of economists argues humans behave differently from neoclassical assumptions. Their actions are more complex and their decisions systematically deviate from the neoclassical axioms. Their approach is inductive and based on experiments with significant emergence of other disciplines, especially psychology and sociology. Although theoretically, both approaches have their positives and negatives, one cannot deny the importance of both approaches. However, not only the teaching pedagogy in both schools of thought varies, but even the outcomes may have certain caveats if graduates are less familiar with one school of thought, especially the traditional one. Nevertheless, the challenge in many economics departments, especially in developing countries with limited faculty and resources, is that overall teaching is moving away from traditional economic theory. Behavioural economics is more fascinating for both faculty and students. Among others, the main reasons are that it seems more interesting to experience the real world with randomised control experiments while funding agencies are more generous towards experiment-based grant applications because they can show something happening in communities. Further, it doesn’t require long derivations and simulations with unrealistic assumptions. The major issue with this approach is that many promising economists are too busy studying multidimensional factors and have lost their focus on fundamental policy variables. The challenge in many economics departments, especially in developing countries with limited faculty and resources, is that overall teaching is moving away from traditional economic theory The teaching pedagogy in these camps is also different. For instance, economists following rational choice theory usually rely on “chalk and talk” method even in the world-leading universities but the behavioural economists are more inclined towards multimedia and overhead slides. Furthermore, students generally find it appealing to attend a behavioural economics class with a cooperative learning environment. In contrast to that, the traditional economics class and content are usually difficult and boring for students. After graduation, the popular destinations of nascent economists are policy design, formulation of development programs and NGOs. Neoclassical mindsets may suggest low tax rates and limited government spending, this can help to expand the private sector and flourish the economy. Behavioural economists may argue differently on tax policy because the different cohort of people, based on their social strata, respond differently and these responses may be more complex than the standard models. They can even claim that tax policy should be more encouraged by psychology. Thus, the approach for policy and also the program design is different in both camps. The knowledge for both should be taught in universities with a balanced approach. The complementary role of both approaches if realised will help design better policy. For instance, the BISP may consider traditional economics thoughts to eliminate poverty, such as a lack of access to credit and limited assets, which are fundamental variables to focus on. But on the other hand, many behavioural economists raised their concerns regarding limited networks across different social groups, psychological and cognitive scarcity, and uncertainties in decision-making, which are equally important policy concerns in poverty alleviation. A complementing role of both schools of thought can help design better policy. A reconciliation of teaching behavioural and neoclassical economics is important. The writer is an associate professor at the Institute of Business Administration, Karachi