Having argued the same thing several times, including recently, I agree with Dani Rodrik:
Economics as craft: I have an article in the IAS’s quarterly publication, the Institute Letter, on the state of Economics. Despite the evident role of the economics profession in the recent crisis and my critical views on conventional wisdom in globalization and development, my take on the discipline is rather positive.
Where we frequently go wrong as economists is to look for the “one right model” – the single story that provides the best universal explanation. Yet, the strength of economics is that it provides a panoply of context-specific models. The right explanation depends on the situation we find ourselves in. Sometimes the Keynesians are right, sometimes the classicals. Markets work sometimes along the lines of competitive models and sometimes along monopolistic models. The craft of economics consists on being able to diagnose which of the models apply best in a given historical and geographical context. ...
Posted by Mark Thoma on Friday, January 3, 2014 at 12:32 PM in Economics, Methodology |