Money, Banks and Finance in Economic Thought

Modelling without Theory: On Georgescu-Roegen's Methodological Criticism of Mathematical Economics

Couix Quentin, Université Paris 1 Panthéon-Sorbonne, Centre d'économie de la Sorbonne

This papers explores the methodology of Nicholas Georgescu-Roegen, and in particular his critical approach to mathematical economics. A brief overview of his career shows that his perspective received little attention despite his favourable position in the discipline. The few comments of mathematical economists, such as Paul Samuelson, seem puzzled by the philosophical point of view adopted by Georgescu-Roegen, and do not understand the nature of his criticism. Hence, I provide a synthetic and critical account of it, focusing on the role of models in economics. His general message is that mathematical models can only serve as simile for pre-existing reasoning, and can be summarised as a criticism of modelling without theory. It comes with a set of methodological principles for sound modelling, which are not, however, deprived of tensions. Then, in order to examine the operational relevance of this methodology and how Georgescu-Roegen manages with these tensions, I consider his flow-fund theory of production. In opposition with the neoclassical production function, his approach rests on detailed conceptual foundations. They give rise to two different kinds of models: a time-explicit representation of single production processes; a disaggregated representation of multiple processes. The latter includes a critical extension of the Leontief growth model, whereas development through qualitative changes is claimed to be impossible to represent by a mathematical model. Overall, these aspects put emphasis on issues related to representation, while more practical applications are missing.

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Keywords: Georgescu-Roegen ; methodology ; modelling ; theory of production ; flow-fund

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