Sunday, December 16, 2012

Lars Syll — Economic models and the relevance of evidence

Neoclassical economics has since long given up on the real world and contents itself with proving things about thought up worlds. Empirical evidence only plays a minor role in economic theory, where models largely function as a substitute for empirical evidence. Hopefully humbled by the manifest failure of its theoretical pretences, the one-sided, almost religious, insistence on axiomatic-deductivist modeling as the only scientific activity worthy of pursuing in economics will give way to methodological pluralism based on ontological considerations rather than formalistic tractability. To have valid evidence is not enough. What economics needs is sound evidence.
Lars P. Syll's Blog
Economic models and the relevance of evidence
Lars P.Syll | Professor, Malmo University

1 comment:

Ralph Musgrave said...

Simon Wren-Lewis (economics prof at Oxford) made much the same point here:

He said:

“Internal consistency rather than external consistency is the admissibility criteria for microfounded models. Which means in ordinary English that academic papers presenting macroeconomic models will be rejected if some parts are theoretically inconsistent with other parts, but not if some model property is inconsistent with the data.”