The three types of inquiry of economic theory
According to Gilboa et al. economists often draw informal or implicit distinctions between three modes of theory:
- “Economics” which includes the study of various social phenomena in economics and related fields, such as political science, finance, decision theory, game theory, and so forth;
- “Economic methods” which refers to the development and study of techniques that economists may employ in their research. Such techniques are sometimes borrowed from other fields, including mathematics, statistics, computer science and machine learning, and are sometimes developed by economists for specific applications;
- “Methodology of economics”, which takes the scientific endeavor of economists as the object of enquiry.
Crucially: Both economics and methodology belong in the social sciences, where the former deals with economic behavior, and the latter deals with the behavior of economists. Methods, by contrast, are tools that are designed to be used by scientists, but do not model a reality.
[F]ads exist in all branches of economics and in other academic disciplines as well. New topics of research pop up, whether by raising new questions or by doubting existing answers, and they often spur intellectual activity. However, we suspect that methodology differs from economics in the speed with which interest in the question wanes.
Economic Theory: Economics, Methods and Methodology
Authors: Itzhak Gilboa, Andrew Postlewaite, Larry Samuelson,David Schmeidler
From: HEC, Paris and Tel-Aviv University, University of Pennsylvania, Yale University
A new paradigm for economics
This article offers a new paradigm for economics: the “multilevel paradigm,” which applies the Darwinian theory of evolution to the analysis of economic processes. “Darwinian” refers to all variation/selection/replication processes, not just genetic evolution, making it highly relevant to economic theory and practice. The economy is viewed as a system that is embedded within political, social and environmental systems. The evolution of economic activities is understood in terms of variation (innovation), selection (cooperative and competitive relations that survive) and replication (transmission and proliferation of ideas). The multilevel paradigm comes with its own definition and purpose of economics, as the discipline that explores how resources, goods and services can be mobilized in the pursuit of wellbeing in thriving societies, now and in the future. We describe the prominent characteristics of the multilevel paradigm: flexible, multiple levels of functional organization; the primacy of social relations, ignorance as uncertainty; multi-faceted, context-dependent wellbeing; and multilevel evolution as progress.
The Making of “Rethinking the Theoretical Foundation of Economics”
By: David Sloan Wilson, Dennis J. Snower – Binghamton University, Hertie School of Governance
