Equilibrium modeling in economics: a design-based defense

Several authors have recently argued that the excessive focus on equilibrium models in mainstream economic analysis prevents economists from providing accurate representations of the complex and dynamic nature of real economic systems. In response, this paper argues the following. Many economic syst...

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Bibliographic Details
Published in:	The journal of economic methodology Vol. 31; no. 1; pp. 36 - 53
Main Author:	Schulz, Armin W.
Format:	Journal Article
Language:	English
Published:	London Routledge 02-01-2024 Taylor & Francis Ltd
Subjects:	Design Economic analysis Economic systems Equilibrium evolutionary economics Social institutions
Online Access:	Get full text
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Summary:	Several authors have recently argued that the excessive focus on equilibrium models in mainstream economic analysis prevents economists from providing accurate representations of the complex and dynamic nature of real economic systems. In response, this paper argues the following. Many economic systems are the products of deliberate and centralized human design. People can and do build and support structures, such as social institutions, aiming to enhance the predictability of economic systems, and thus to move them toward being equilibrium systems. This provides a reason to think that many economic systems can be represented by equilibrium models.
ISSN:	1350-178X 1469-9427
DOI:	10.1080/1350178X.2024.2310214