by Summary:
In other words, it is not the behaviour of the individual agents that determines the model’s overall structure, nor even the structure of the preference ranking. Instead it is the macro requirement for a particular structure which dictates the behaviour attributed to the individual agents.[2] The “purpose” of this “particular, useful structure” is to rationalize the macro “conclusion” assumed at the beginning of the exercise. The resulting model shows micro phenomena determining macro phenomena, whereas, in fact, it is the starting point of the macro structure that has determined the behaviour of the model’s micro elements. Likewise, “rationality” becomes something defined to meet the exigencies of a desired conclusion. Then the model becomes prescriptive based on it "descriptive"
Topics:
Mike Norman considers the following as important: neoclassical economics
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In other words, it is not the behaviour of the individual agents that determines the model’s overall structure, nor even the structure of the preference ranking. Instead it is the macro requirement for a particular structure which dictates the behaviour attributed to the individual agents.[2] The “purpose” of this “particular, useful structure” is to rationalize the macro “conclusion” assumed at the beginning of the exercise. The resulting model shows micro phenomena determining macro phenomena, whereas, in fact, it is the starting point of the macro structure that has determined the behaviour of the model’s micro elements. Likewise, “rationality” becomes something defined to meet the exigencies of a desired conclusion. Then the model becomes prescriptive based on it "descriptive"
Topics:
Mike Norman considers the following as important: neoclassical economics
This could be interesting, too:
Mike Norman writes Lars P. Syll — On the non-neutrality of money
Mike Norman writes REVIEW ESSAY–The Reformation in Economics: A Deconstruction and Reconstruction of Economic Theory by Philip Pilkington Marc Morgan
Mike Norman writes ‘Fridays for Keynesianism’ — Peter Bofinger
Mike Norman writes Three Economic Ideas Threatening to Defenders of the Status Quo — Peter Cooper
In other words, it is not the behaviour of the individual agents that determines the model’s overall structure, nor even the structure of the preference ranking. Instead it is the macro requirement for a particular structure which dictates the behaviour attributed to the individual agents.[2] The “purpose” of this “particular, useful structure” is to rationalize the macro “conclusion” assumed at the beginning of the exercise. The resulting model shows micro phenomena determining macro phenomena, whereas, in fact, it is the starting point of the macro structure that has determined the behaviour of the model’s micro elements. Likewise, “rationality” becomes something defined to meet the exigencies of a desired conclusion.
Then the model becomes prescriptive based on it "descriptive" characteristics: Real individuals in society should behave in accordance with the model assumptions. If they don't, then behavior modification through institutional means is indicated.
Logical slight of hand based on ideological preference.
Neoclassical economics usually reads its models backwards
Edward Fullbrook