Dilemmas of an economic theorist

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Abstract

What on earth are economic theorists like me trying to accomplish? This paper discusses four dilemmas encountered by an economic theorist: The dilemma of absurd conclusions: Should we abandon a model if it produces absurd conclusions or should we regard a model as a very limited set of assumptions that will inevitably fail in some contexts? The dilemma of responding to evidence: Should our models be judged according to experimental results? The dilemma of modelless regularities: Should models provide the hypothesis for testing or are they simply exercises in logic that have no use in identifying regularities? The dilemma of relevance: Do we have the right to offer advice or to make statements that are intended to influence the real world?

Original languageEnglish
Pages (from-to)865-883
Number of pages19
JournalEconometrica
Volume74
Issue number4
DOIs
StatePublished - Jul 2006

Keywords

  • Economic education
  • Economic theory
  • Fable
  • Game theory
  • Hyperbolic discounting
  • Jungle
  • Time response

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