by Taking into account the subtle nature of the underlying differentiation of assumptions, whose subtlety is exponentially increased by the structural lack of transparency with regard to the question how to assign one’s assumptions to explanatory and auxiliary hypotheses, it is unsurprising to see interpretations according to both extremes within the whole of economic literature. For neoclassical theory as an intellectual construct such a state implies an enormously advantageous situation. Main parts of neoclassical theory may claim unbound relevance for the sphere of human action in general, while reverting to a thought-experimental interpretation of economic models, which is invincible to any empirical argument and allows for rejecting the relevance of any particular empirical result. Rhetorically, the first extreme offers an incredibly powerful offensive device (by claiming all-encompassing relevance), while the second may be considered as an opportunity to excel in defensive strategies (by ‘retreating’, i.e. systematically reducing a model’s intended domain of application).
Topics:
Lars Pålsson Syll considers the following as important: Economics
This could be interesting, too:
Lars Pålsson Syll writes The total incompetence of people in charge of the US economy
Lars Pålsson Syll writes Ergodicity — a questionable assumption (wonkish)
Lars Pålsson Syll writes Vägval i finanspolitiken
Lars Pålsson Syll writes Economics — a dismal and harmful science
Taking into account the subtle nature of the underlying differentiation of assumptions, whose subtlety is exponentially increased by the structural lack of transparency with regard to the question how to assign one’s assumptions to explanatory and auxiliary hypotheses, it is unsurprising to see interpretations according to both extremes within the whole of economic literature.
For neoclassical theory as an intellectual construct such a state implies an enormously advantageous situation. Main parts of neoclassical theory may claim unbound relevance for the sphere of human action in general, while reverting to a thought-experimental interpretation of economic models, which is invincible to any empirical argument and allows for rejecting the relevance of any particular empirical result. Rhetorically, the first extreme offers an incredibly powerful offensive device (by claiming all-encompassing relevance), while the second may be considered as an opportunity to excel in defensive strategies (by ‘retreating’, i.e. systematically reducing a model’s intended domain of application).