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Between Isolations and Constructions: Economic Models as Believable Worlds

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Abstract

The goal of this chapter is to show how economists explain by using models of economic phenomena. Hardt tries to overcome the dichotomical divide between conceptualizing models as isolations and constructions. This is done by introducing the idea of economic models as believable worlds; precisely, descriptions of mechanisms that refer to the essentials of the modelled targets. Hardt uses Jim Woodward’s conceptualization of mechanisms. ‘Between isolations and constructions. Economic models as believable worlds’ shows that such models do not offer the perfectly true descriptions of the actual world but rather justified beliefs about the modelled phenomena. The analysis throughout the chapter is supported by in-depth examination of the Hal Varian’s (1980) model of sales that is here treated as a representative way of reasoning in neoclassical economics. Hardt finishes by showing how literally false models can nevertheless explain.

Keywords

Models in economics Mechanisms Truth in economics Isolationism in modelling Constructivism in modelling Hal Varian 

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Copyright information

© The Author(s) 2017

Authors and Affiliations

  1. 1.Faculty of Economic SciencesUniversity of WarsawWarsawPoland

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