A plea for reorienting philosophical attention from models to applied economics

GUSTAVO MARQUÉS

Real-World Economics Review

World Economic Association

Año: 2013 p. 30 - 43

1755-9472

In the past, conventional economic models have been criticized for their inability to explain and predict, as well as for the difficulties in applying them to specific economies. It was assumed that these shortcomings were due to the ?unrealistic? nature of some of their assumptions, and for decades this reason has been advanced to dismiss their practical utility and the possibility that they could be true. Musgrave (1981) makes an important contribution to this debate showing that many of the statements used in the formulation of economic models ? which were considered false when interpreted in a too literal sense ? properly understood mean something completely different that may also be true. A similar approach is advocated by Lipsey & Steiner, 1981. Recently, new arguments have been offered that improve our understanding of the role of different classes of stylized assumptions (i.e., idealizations, distortions and omissions) in the construction of economic models (Mäki, 2002, 2008, Weisberg, 2007). These contributions have been successful in addressing the old-fashioned ?realistic? attack on conventional economic models, showing that they cannot be dismissed as carriers of relevant information about the world on the basis of these reasons, and there is nothing inherently wrong in the practice of mainstream model building.