Conventional economic modeling is frequently criticized for being “unrealistic” due to the variety of unrealistic assumptions that underpin many models. Critics frequently wonder how models that are unrealistic or false can accurately explain economic phenomena. This criticism and the problem it presents for economics is captured by Julian Reiss’s “explanation paradox.” This paper aims to evaluate Reiss’s paradox and assess the problems it poses for economics as a positive science. To address this problem, I survey a variety of competing strategies offered by philosophers and economists before critically evaluating the validity of the paradox. I conclude that while economic models cannot be considered explanatory because they do not completely and accurately identify the causes of economic phenomena, they still offer understanding that is valuable for informing economic policy.
Date of Completion
Bachelor of Arts in Economics
Date of Award
Haupt, Eric, "Understanding Without Explanation? A Philosophical Inquiry Into the Explanation Paradox of Economic Models" (2020). Economics Theses. 109.