Abstract
This paper examines two recent approaches to the nature and functioning of economic models: models as isolating representations and models as credible constructions. The isolationist view conceives of economic models as surrogate systems that isolate some of the causal mechanisms or tendencies of their respective target systems, while the constructionist approach treats them rather like pure constructions or fictional entities that nevertheless license different kinds of inferences. I will argue that whereas the isolationist view is still tied to the representationalist understanding of models that takes the model-target dyad as the basic unit of analysis, the constructionist perspective can better accommodate the way we actually acquire knowledge through them. Using the example of Tobin’s ultra-Keynesian model I will show how many of the epistemic characteristics of modelling tend to go unrecognised if too much focus is placed on the model-target dyad.
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Notes
It should be noted that even though both Cartwright and Mäki draw heavily on Mill, their versions of ‘isolation’ differ. Cartwright earlier used the terms abstraction and idealization rather than isolation, abstraction referring to omission (e.g., Cartwright 1989). However, what is common to both (earlier) Cartwright and Mäki is that they understand economic modelling as studying how a causal factor “behaves ‘in isolation’ (i.e., when it is the only cause for the targeted effect at work)” (Cartwright 2009, section 1), from which perspective models and real experiments appear as analogous operations. Sugden (2009) discusses Cartwright’s version of ‘isolation’.
Other authors have also recently suggested that models could be conceived of as independent objects—although by this they mean different things. Morrison (1999) and Morrison and Morgan (1999) conceive of them as autonomous entities partly independent of theory and data. Boumans (1999) releases models from the theory-data framework, considering them intricate constructions made up of various ingredients. Knuuttila (2005), in turn, treats them as independent entities that do not have any pre-established representational ties to real-world systems.
In fact, this very discussion on the causation of business cycles and subsequently of inflation proved painstaking in many ways, since even though it was all about causality, Friedman was wary of using causal language. See Hoover (2004) for the general avoidance among economists of using causal language.
In Monetary history Friedman and Schwartz present yet another argument for the causal priority of money. They note that the cyclical relation between the money stock and income has been relatively stable in the long run even though the monetary system has varied a lot. From this they conclude that such observed stability would have been unlikely if business life had determined the money stock and not the other way around.
For a discussion of this strategy in relation to other modelling strategies, see Weisberg (2007b).
This practice among economists of working with multiple models related in various ways is largely in line with what Weisberg (2007b) terms multiple-models idealization. Although this practice displays features of robustness analysis, it seems more like the examination of different theoretical possibilities and accounting for empirical findings than any consistent effort to find out which assumptions are doing the work.
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Acknowledgments
I wish to thank all the participants in the workshop on ‘Models as Isolating Tools or Credible Worlds?’ at the University of Helsinki, as well as the two referees of Erkenntnis for their valuable comments on this paper. The expression “modelling styles”, which I use to describe Tobin’s ultra-Keynesian model, was suggested by Robert Sugden in the Helsinki workshop.
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Knuuttila, T. Isolating Representations Versus Credible Constructions? Economic Modelling in Theory and Practice. Erkenn 70, 59–80 (2009). https://doi.org/10.1007/s10670-008-9137-7
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DOI: https://doi.org/10.1007/s10670-008-9137-7