Contrastive explanation and unrealistic models: The case of the new economic geography

The contrastive approach to explanation is employed to shed light on the issue of the unrealisticness of models and their assumptions in economics. If we take explanations to be answers to contrastive questions of the form, then unrealistic elements such as omissions and idealizations are (at least partly) dependent on the selected contrast. These contrast-dependent assumptions are shown to serve the function of fixing the shared causal background between the fact and the foil. It is argued that looking at the explanations offered by economic models in contrastive terms helps to be precise about their explanatory potential, and hence, to assess the adequacy of their unrealistic assumptions. I apply the insights of the contrastive approach to the 'new economic geography' models, and to a selection of criticisms directed at them. This case illustrates how a contrastive analysis can help the solution of disputes concerning the unrealisticness of particular models.