## INET — unabated faith in mathematical modelling

26 Sep, 2014 at 11:15 | Posted in Economics | 1 CommentIn the end, very few INET participants engage in a methodological critique that challenges the emphasis on modelling. One exception comes from Tony Lawson, participating at the opening conference in 2010, who is well known for his critique of the dominant economic methodology … Lawson makes an explicit link between the failure of economists to offer insights into the crisis, on the one hand, and the dominant economic methodology, on the other. In particular he points to an excessive preoccupation with mathematical modelling. Lawson’s comments below capture the intellectual tendency characterising INET events so far:

“Very many economists attended the conference, all apparently concerned critically to reconsider the nature of academic economics. It is in such a forum if anywhere that we might hope to find mainstream economists challenging all but the most obviously acceptable aspects of their theories, approaches and activities.

Although George Soros, who sponsors the Institute, shows some awareness that the reliance upon mathematics may at least be something to question … for most of his close associates the idea that there might be something problematic about the emphasis on forms of mathematical technique does not appear even to cross their minds …”

Thus, we find, to round off this section, that although INET is quite explicit about its concern with the state of economics, as well as about its search for alternatives, its overall orientation in the end (or so far) is not on a reduction in the emphasis on mathematical modelling. As things currently stand, the forum continues to show faith in the dominant economic methodological paradigm. …

Overall, we find that despite appearances, many economists across the board have tended to reaffirm their position. They do so primarily by a methodological critique that consists in advocating the development of newer, better mathematical models that this time, allegedly, achieve greater realisticness (i.e. achieve a closer match to reality), promising a greater ability to successfully predict. Representatively, Krugman adopts such a position. …

The question of whether mathematical tools are appropriate is something that, in the circumstances, we might have expected to receive significant attention. But this is not what we have found. Our study suggests rather that, even when recognising their discipline is in crisis, economists continue to take existing methodology as an unquestionable (sacrosanct) given.

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It seems to me (as a mathematician) that the problem is not so much an “excessive preoccupation with mathematical modelling” as an almost wilful ignorance of the mathematics of modelling, in particular that (such as Keynes’) which exposes the pseudo-mathematics that promises “a greater ability to successfully predict” even when it is clearly (and mathematically) impossible.

Yes, we need to reform the methodology, but surely the solution is more mathematical mathematical modelling, not less.

Comment by Dave Marsay— 26 Sep, 2014 #