Sunday, December 5, 2010

What We Believe and the Tools We Use

At Worthwhile Canadian Initiative, Nick Rowe writes:
What we research, and what we believe, aren't necessarily the same thing. What gets published in the journals is a survey of what we are currently researching. It isn't an accurate survey of what we currently believe. The whole point of a journal is not to publish what everybody already believes. The journals are a map of where we are currently exploring for gold. They are not a map of existing gold deposits. They are not a map of where we think gold might be found in places we can't currently explore.
To which I might add, economic models can be thought of as tools.  Using a particular tool (model) to do a job (normal science) shouldn't be taken to imply a belief that the model is the right one for all economic phenomena.  In many cases, its much easier to make progress (and get papers accepted) if one uses existing tools.  For instance, I've used a real business cycle model in my own research - it turned out to be an effective device to implement an idea I had about real exchange rate volatility.  But it does not mean that I believe that real business cycle theory is a correct explanation of economic fluctuations.

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