From Equilibrium to Contingency: Rethinking Economic Modeling

Leonardo Ivarola (), Alfredo Garcia and Martín Szybisz
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Leonardo Ivarola: CONICET - Consejo Nacional de Investigaciones Científicas y Técnicas [Buenos Aires], University of Buenos Aires, Argentina
Alfredo Garcia: University of Buenos Aires, Argentina
Martín Szybisz: University of Buenos Aires, Argentina

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Abstract: This paper presents a critique of the concept of order and equilibrium in economics. Based on the philosophical notion of contingency (Meillassoux, 2008; Hui, 2019), it is shown that economic approaches grounded in equilibrium as the cornerstone of their theoretical framework suffer from three conceptual problems. First, there is an ontological problem in which things could always be otherwise. Accepting this means that economic systems should not be conceived in mechanistic terms, but rather as metastable processes open to transformation. Second, there is an epistemic problem, since there is no guarantee that what holds today will remain valid in the future. Third, there is a pragmatic problem, related to people's actions in an ever-changing environment. It is proposed that these three problems are articulated in a triad that, once open to contingency, evolves recursively. In particular, it is argued that traditional economic models, which focus on deductive rigor, face serious limitations in both external validity and their ability to learn. In contrast, simulation models are proposed as a key instrument for examining economic scenarios open to contingency.

Keywords: Contingency Recursive learning Equilibrium Adaptive processes Economic modeling Simulation models; Contingency; Recursive learning; Equilibrium; Adaptive processes; Economic modeling; Simulation models (search for similar items in EconPapers)
Date: 2025-09-12
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