Abstract

KAY, John. The Map is Not the Territory: An Essay on the State of Economics. Rev.econ.inst. [online]. 2014, vol.16, n.30, pp.13-24. ISSN 0124-5996.

Much of modern economics, including in particular the dominant paradigms in macroeconomics and financial economics, proceedson the basis that there is a "true" model of the world, which can be deduced from a set of axioms based around rational choice. But in reality there is, and can be, no model that describes "the world as it really is". Models are useful -even indispensable- tools in economics but are necessarily partial, provisional, and context specific. Economics should be pluralist in approach, employing inductive as well as deductive reasoning. The map is not the territory.

Keywords : macroeconomics; inductive reasoning; deductive reasoning; rational choice.

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