ABSTRACT
The key elements of economic methodology, unchanged from the classical days, are the status of rational choice and the use of equilibrium as a modeling concept. If these are limitations, so be it: every subject has core restrictions in its methodology, which in fact represent its strengths and distinctive insights. It is not that we believe that everybody chooses rationally all the time – on the contrary, the most orthodox of economists is interested in learning from behavioral research. Nor do we think the economy is always in equilibrium. That would be just as silly. Nevertheless, both elements are core to our way of thinking. [. . .] [T]he paradigm is unchanged, if that means the essential elements of economic methodology, but economists are unified by a new consensus as to what economics is about. Not the study of competitive markets, but rather an understanding of society as the aggregation of millions of individual decisions, in specific contexts shaped by history and geography, and by our own evolutionary history.
