Derivational Robustness, Credible Substitute Systems, and Mathematical Economic Models : The Case of Stability Analysis in Walrasian General Equilibrium Theory

Abstract: This paper supports the literature which argues that derivational robustness can have epistemic import in abstract economic models. The defense is based on a particular example from mathematical economic theory, the dynamic Walrasian general equilibrium model. It is argued that derivational robustness first increased and later decreased the credibility of the Walrasian model. The example demonstrates that derivational robustness correctly describes the practices of a particular group of influential economic theorists and provides support for the arguments of philosophers who have offered a general epistemic justification of such practices