Models of Mechanisms and their Role in Building Economic Explanations

Łukasz Hard

Ekonomia journal, 2014, vol. 37

Abstract: Economists often refer to mechanisms in explaining economic phenomena. Therefore, models of mechanisms play an important role in economics. The goal of the paper is to investigate of what kind of entities such models are and what is the epistemological status of theoretical claims built upon them. These issues are analyzed from the perspective provided by the general philosophy of sciences, including philosophical studies on economics. The paper refers also to the history of economics while accounting for the popularity of mechanistic explanations in this particular science. Methodological studies here presented are illustrated by references to the chessboard model by T. Schelling (1978) and a model a sales by H. Varian (1980). The paper concludes that theoretical claims built upon models have the status of beliefs rather than claims about universal regularities. Moreover, the closer the structure of such a model to the structure of its target, the more credible such a model is.

Keywords: mechanisms; economic models; the status of economic laws; philosophy of economics (search for similar items in EconPapers)
Date: 2014
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