We tend to think of economic theory as the instruction sheet for running the economy. Like the instructions that come with an IKEA dining table, the theory says that the box marked “the economy” contains X items that fit together in Y order. Ignore the instruction sheet and your economic IKEA dining table will not come out too well. This view sees economic theory as what philosophers call a “correspondence theory” of the world. Whatever the instruction sheet (theory) says about the table (reality) is true about all tables (states of the world) regardless of where and when the information is applied. But what if economic theories are less than these perfect correspondences of the world? What if our knowledge of the economy becomes less relevant over time as the world changes while the theory stays the same? Our theory would then correspond less over time, becoming in the process a less reliable instruction sheet.

Mark Blyth, Austerity, loc. 119