Keynes
The master-economist must possess a rare combination of gifts …. He must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate the particular, in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature or his institutions must be entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood, as aloof and incorruptible as an artist, yet sometimes as near to earth as a politician.
Problems of Economics
- Lacks explanatory power
- Little predictive power
- Failed microfoundations of macroeconomics
- Empirical falsification of Rational Choice Theory
Models & Explanation
Concepts
- Deductive-Nomological Model
- Pluralism vs. Monism
- How-Possibly vs. How-Actually
- Reductionism
- Determinism
- Essentialism
- Supervenience
- Analogical Reasoning
- Credible-worlds
- Explanation Paradox
- Approximation vs. Charaterization
- paradoxes of EUT
- Philosophers of Science
Synopsis
What is economics? - Friedman: Instrumentalism vs Realism
- What is a model?
- Hausman, D. M. (1994). Why look under the hood.
- Gibbard, A. and Variant, H. (1978). Economic models.
- Example economic models
- Akerlof, G. (1970). The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism.
- Schelling, T. (1971) Dynamic Models of Segregation
- How to think of models
- Sugden, R. (2000) Credible Worlds: The Status of Theoretical Models in Economics
- Cartwright, N. (1995). Ceteris paribus laws and socio-economic machines.
- Dupré, J. (2001) Economics without Mechanism
- Explanations seem impossible…
- Reiss, J. (2012). The explanation paradox.
- Becker, G. S. (1962). Irrational behavior and economic theory.
- General Equilibrium Theory?
- Hausman, D. M. (1981). Are general equilibrium theories explanatory?
- Rosenberg (1983): If Economics Isn’t a Science: What Is It?
History of Science
- Development of Science
- Kuhn, T. (1962) The Structure of Scientific Revolutions (Selections)
- Lakatos, I. (1995) The Methodology of Scientific Research Programmes,”
- Blaug, M.(1976) Kuhn vs. Lakatos or Paradigms vs Research Programmes in the History of Economics
- Stanfield, R. (1974) Kuhnian Scientific Revolutions and the Keynesian Revolution
- Pheby, J. (1988) Kuhn and Economics.
- Reductionism: the microfoundations project
- Hoover, K. (2001). Does Macroeconomics Need Microfoundations?
- Elster J. (1988) The Nature and Scope of Rational-Choice Explanation.
- Reiss, J. (2013). Chapter 3: Rational Choice Theory. Epistemic Natural Selection
Concepts
Assignments
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Model
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Mechanism
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Explanation