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A defence of absurd theories in economics

Forfattere:

Nordberg, Morten and Ole Røgeberg

År:

2005

Referanse:

Journal of Economic Methodology

Vol 12, no 4, pp 543-62

Summary

Theories that involve plainly false and even bizarre assumptions are argued to have an important role in bundling empirical facts in a way that allows these to be understood, handled and used as modules in the construction of mechanisms by economists with human cognitive limits. Absurd theories are subcomponents used in a valid explanatory strategy as long as the mechanisms only derive the implications of the facts summarised. This provides a defence and explanation of many economic theories, but also imposes hard limits on such theorising.

Nøkkelord:

As-if theory, economic methodology, welfare economics

JEL:

B41, D00

Prosjekt info:

Oppdragsgiver: Norges forskningsråd
Oppdragsgivers prosjektnr.:
Frisch prosjekt: 4101 - Økonomi og helse

Kontakt:

morten.nordberg@frisch.uio.no

Finansiering:

The Research Council of Norway