Multiple Routes to Progress in Model-Based Economics

This article examines whether characteristic modeling practices in economics lead to progress, that is, improved explanations and predictions. We question the widespread assumption that progress in modeling occurs solely through successive vertical refinements toward a single "best"model. Instead, we propose that progress can occur through multiple pathways. Specifically, we identify five distinct horizontal paths to progress: increased isolation of causal factors, differentiation of targets and purposes, derivation of robust theorems, multiplication of inconsistent perspectival models, and exploration of novel possibilities. We argue that these pathways, when properly constrained, increase explanatory and predictive power and therefore lead to scientific progress.