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Striking the optimal balance: theoretical versus empirical methods in economicsWe argue that the traditional debate concerning economic models, regarding the role of unrealistic assumptions and lack of empirical contact, is no longer fruitful. We focus on the question of how effectively models are used, rather than what they can in principle do for us. We compare the success of theoretical economic models with that of empirical, non-theoretic tools. The question becomes one of division of labor: if theoretical models can provide local explanations, understanding, or even policy prescriptions, how valuable are they compared to experiments, fieldwork, and other empirical methods?
History and Philosophy of Science
Birkbeck College, University of London