Critical Realism vs. Economic Rhetoric
Discussing 'realism' has been a growth industry lately. Where once we might have heard philosophers argue over realism vs idealism or vs instrumentalism. Today the discussion concerns various types of realism. Basically the main question is: do the model's assumptions represent realty, that is , represent real, objective world? In this paper I am going to apply critical realism to two aspects of the methodology of model building. In Section 1, I will criticize some common excuses given for accepting less than desirable realism in economic models. In section 2, I will discuss various obstacles to obtaining realistic economic models.
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