Equilibrium modeling in economics: a design-based defense

Armin W. Schulz

Journal of Economic Methodology, 2024, vol. 31, issue 1, 36-53

Abstract: 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.

Date: 2024
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DOI: 10.1080/1350178X.2024.2310214

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