The Purpose of the Study and the Analytic Constraints
The task of economic theory is not ‘to hold, as ’twere, the mirror up to nature’. The world around us is too complex and too subject to minor aberrations for a true reproduction to have analytic value. Factors such as impulse buying, transitory interruptions in supply, shortlived imperfections in markets can, together with the general overlay of stochastic disturbances and dynamic forces, complicate the analysis without offering compensating insights. Rather, the purpose of a body of economic theory is to identify the main interdependencies of the system and to isolate those interdependencies in such a way that the crucial relationships and their causal links stand out in sharp focus. The emphasis on the main causal relationships makes possible an analysis of the effect of a specified disturbance upon the working of the economic system.
KeywordsInternational Trade Main Sector Multinational Enterprise Keynesian Model Core Theory
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