Cuarren a What Models Do ‘be Swedish-born economist Axel Leljonhufvud Published in 1973 a ie article called “Lie among ‘he Econ." fe wat a delightful mock echaograpy in which he described in great dtl the prevailing practices J ‘wt elations, and boos among economists, What defines ihe “Econ tebe" explained Lejoahutvud, i their obsearon wats what Te called “‘modlv'—a reterence to the Sylned mae Eatal ode Wat are sonoma Tool of Tie ae WE otto apparent practical we, dhe Move ornate anreermnemat | SeBed i Rexcra penont satun The Econ phason ‘nodh, Lejonhafwad wrote, cxpliar why they hold memiben of ether tribes such asthe "Sociogs” and “Pols in such low ‘tard: those other tes do not make mods? 1 Aut Leonid “Le among te Ben Hon Ean oa 8. Gepember 197: 327 Since sae wor pede eoats ae ae Lejonhfd’s words stil rng true more than four decades later, Training in economics consists esetially of learning @ sequence of models, Perhaps the mos imsporanc determinant ofthe pocking order inthe profession isthe ability to develop new modes, or wie existing models in conjunction with new evidence, to shed light on some aspect of social reality. The ost heated intelectual debates revolve around the relevance ‘or applicability ofthis or that model. you want to grievously ‘wound an economist, say simply, “You dont havea mode.” Model ate source of pide. Hang around economists and ‘before lng you wil encounter the sbiguitous mag ot T-shirt that sy, “Economints do it with models” You will ao got the sense that may among them would get rather more joy out ‘of toying with those mathematial conzapions than hanging vt with che runway prancers ofthe real world, (No sexsi intended here: my wife/ako an economist, was once presented one of dove ngs gif from herstadens atthe end ofa erm) For enitcs, economist reliance on modeh captures slmose cverything that is wiong with the profession: the reduction ‘of the completes of rocial fe toa fw simplisic ration ships the willie to make patenly untrue asamptions, the ‘obvesion with mathematical rigor over zealism, the frequent jump frm stylized aeration vo policy conclusions. They find it mind-boggling that economists move o quickly fom equa tions on the page vo advocacy of sy, ice trade ora ex policy of one kind or another, An slernative charge asets that eco- nomics makes the mundane complex. Economic models des. up common sense in mathemaccal formalism. And among the hatches critics are economist who have chosen &o pare e378 swith the orthodoxy: The maverick economist Kenneth Boul ing is supposed to have said, "Mathematis brought rigor to economics; unfortunately ic also brought mori" The Cam- bridge Univesity economist Ha-Joon Chang sys, 95 percent of economics is common sense—made to Jook dificult, with ‘he use of jargons and mathematics Intra, simple models of the type that economist con- seruce ae abilutely ewental ro understanding the workings of society. Their simplicity, formalism, and neglect of many ‘aces ofthe eal world are precisely what make chem valuable, ‘These area feature, nota bug, What makes a model sel is ‘hae i apres a aspect of rely, What makes i ndipens- able, when used well is thar i eapeuses the mes lent apc of reli in a give onet. Difeent contents—ditferent markets, social settings, countries, time perio, and so on—requite iferent models. And this is where economist eypicaly get into twuble. 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