Preface to ‘Economic Models as Credible Worlds or as Isolating Tools?’
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Economics is often criticized for its modelling practices. Typical charges include claims that modelling assumptions are unrealistic, that modelling is overly formalistic, that models are hardly ever tested and that model results do not say anything about the real world. Given these shortcomings, critics argue, economics is not fit to predict or explain, or to give useful policy advice. In fact, some claim on these grounds that economics is not a science at all.
Many of these criticisms were put forward in the context of the so-called realism of assumptions debate, which centred on various attempts to either establish the realism of theoretical assumptions in economics, or to justify their non-realism. Interest in this debate waned somewhat in the 1970s, as many economists adopted Milton Friedman’s ‘as-if’ approach to justify their modelling practices. However, the central issue remained unresolved. In particular, it became clear that the predictive success of economic models was very...