Bert hamminga  How economists use the term "theory" 010101 Back

<Still working on this one...#>

There is often quite some confusion about how economists in general employ the terms "theory" and "model".  There is little to say about this in general. In many specific cases it is used to refer to all conditions in {C₁,...}, in other specific cases only to the "basic" or fundamental conditions in this set, such as utility and profit maximisation (the basic micro-economic "theory"), or, in macro-economic theories, for instance the basic Keynesian assumptions (Keynesian theory), or some fundamental price explaining equation (Monetarist theory). Finally, in still other specific cases an interesting theorem is referred to as a "theory" (as for instance, in some cases with the notion "Heckscher Ohlin theory"). In general, the term "theory" is used in a very loose sense, but in any specific context it is usually quite clear what is referred to. In the economist's language, "theory" is employed in much the same way as many people use e.g. the term "structure". In itself, "structure" has only a very vague meaning, but it is usually clear what people mean once they talk about specific structures (that might differ so much from each other like the Eiffel tower from a mathematical group, both of which are called structures).