Subject: | |
From: | |
Date: | Fri Mar 31 17:19:19 2006 |
Content-Type: | text/plain |
Parts/Attachments: |
|
|
----------------- HES POSTING -----------------
In a message dated 99-09-27 20:11:01 EDT, Alan Freeman wrote:
<<
It seems to me that the question 'what is endogenous to the market' is
co-terminous with the ontological question 'what is a market'? Since
this is in a sense the definition of the subject matter of economics, it
strikes me as a significant deficiency that the distinction is used so
much, and seems to be discussed so little.
>>
Just a quick reply to what is an interesting and complex question.
When characterizing a market and the market process, we specify
variables and the relationships between them. The magnitudes of one
or more of the variables are "determined" within the four corners of the
model that we build---we call these endogenous variables. Other
variables have values or specific limits on their values stated at the
outset before the model is set to work. These values are specified as
ocurring outside the model ---they are exogenous variables.
The river flows within banks of the river that do change---are always
changing to some extent---but for some purposes of analysis can be
considered fixed or permanent. These (the banks) are therefore
exogeneous to the model of the river and our model of how its flows.
To summarize, what is exogenous and endogenous is imposed on the
real world by the human mind. Characterizing variables one way or
another way does not commit oneself to any ontological description of
the world and the way it works. One can argue that models that
continually help us understand the world and make that world
comprehensible must (therefore) capture something fundamental about
the world and the way it actually works. This position might be
contrasted with view that the model tells us more about the way our
minds work and less about the world itself. Still, I think it is possible
to separate any ontological description of the world from the more
limited question about what constitutes explanatory success in the
social sciences. There is always the broader set of questions about
what is science and its relationship to truth or true understanding.
Laurence S. Moss
------------ FOOTER TO HES POSTING ------------
For information, send the message "info HES" to [log in to unmask]
|
|
|