•  14
    In this paper, I draw a parallel between the stability of physical systems and that of economic ones, such as the US financial system. I argue that the use of equilibrium assumptions is central to the analysis of dynamic behavior for both kinds of systems, and that we ought to interpret such idealizing strategies as footholds for causal exploration and explanation. Our considerations suggest multi-scale modeling as a natural home for such reasoning strategies, which can provide a backdrop for th…Read more
  •  29
    We study the Johansen–Ledoit–Sornette model of financial market crashes :219–255, 2000). On our view, the JLS model is a curious case from the perspective of the recent philosophy of science literature, as it is naturally construed as a “minimal model” in the sense of Batterman and Rice :349–376, 2014) that nonetheless provides a causal explanation of market crashes, in the sense of Woodward’s interventionist account of causation.
  •  48
    Philosophers sometimes claim that economics, and the idealizing strategies it employs, is ultimately unable to provide genuine laws of nature. Therefore, unlike physics, it does not qualify as an actual science. Careful consideration of thermodynamics, a well-developed physical theory, reveals substantial parallels with economic methodology. The corrective account of scientific understanding I offer appreciates these parallels: understanding in terms of efficient performance.