Book contents
- Frontmatter
- Contents
- Acknowledgements
- List of Figures
- Introduction
- 1 The Financial Crisis and Modern Economics: From Surprise to Puzzlement
- 2 A Different Look at Economic Theory: The Anthropological Approach
- 3 The ‘Building Blocks’ of Modern Economics: We Do Really Need a Meta-Theory
- 4 The Meta-Theory at Work: A Case Study in Growth Theory and Real Business Cycle Theory
- 5 Governments and the Financial Crisis: Making Economic Policy in the Dark
- 6 Explaining More Complex Phenomena: The Financial System
- Final Remarks
- Notes
- Works Cited
- Index
3 - The ‘Building Blocks’ of Modern Economics: We Do Really Need a Meta-Theory
- Frontmatter
- Contents
- Acknowledgements
- List of Figures
- Introduction
- 1 The Financial Crisis and Modern Economics: From Surprise to Puzzlement
- 2 A Different Look at Economic Theory: The Anthropological Approach
- 3 The ‘Building Blocks’ of Modern Economics: We Do Really Need a Meta-Theory
- 4 The Meta-Theory at Work: A Case Study in Growth Theory and Real Business Cycle Theory
- 5 Governments and the Financial Crisis: Making Economic Policy in the Dark
- 6 Explaining More Complex Phenomena: The Financial System
- Final Remarks
- Notes
- Works Cited
- Index
Summary
Modelling Agent's Economic Behaviour: The Choices that Theorists Face
In the previous chapter, we have seen that all economic theories or models rely upon a specific anthropology, that is, upon some more or less explicit ideas of human beings as economic agents. There we classified theories and models under three large headings, neoclassical, Keynesian and Austrian. Setting aside historical issues, this classification was made taking into account the kind of ‘statements’ about the economic agent and the environment they create. We saw that there are specific statements that made a model ‘Keynesian’ and not ‘neoclassical’, and vice versa. It is also true that ‘mixed’ or ‘hybrid’ models can be found, but ultimately they rely upon a critical statement or assumption which allows classifying them into one of these broad categories. This classification is useful in itself as we can arrange the literally thousands of models and theories according to their underlying assumption. But this will be of limited interest if it does not help to improve our understanding of economic processes.
The question here is whether a systematic research on the structure of models and theories is possible to make them more reliable and closer to reality. Or, more precisely, if it is possible to appreciate the differences and commonalities of economic theories from a point of view that includes all of them simultaneously.
- Type
- Chapter
- Information
- Financial Crisis and the Failure of Economic Theory , pp. 51 - 74Publisher: Pickering & ChattoFirst published in: 2014