Grey-Box Understanding in Economics

In economics, models are built to answer specific questions. Each type of question requires its own type of models; in other words, it defines the requirements that a model should meet and thereby instructs how the models should be built. An explanation is an answer to a ‘why’-question. In economics, this answer is provided by a white-box model. To answer a ‘how much’-question, which is asking for a measurement, economists can make use of black-box models. Economic phenomena are often so complex that white-box models that should function as explanations for them appear not to be intelligible. So, for questions concerning understanding - e.g. ‘Can you clarify this phenomenon‘’ ‘Can you tell me what would happen if‘’ - it would appear that grey-box models are more adequate. This implies a twofold revision of de Regt and Dieks’s (2005) criteria for understanding phenomena. First, whenever the term ‘theory’ is used it should be substituted by ‘model’. Secondly, the Criterion for the Intelligibility of Models (CIM) is now simplified as: ‘A model M is intelligible for economists (in context C) if they have built M as a grey-box construction’. A grey-box construction implies that they ‘can recognize qualitatively characteristic consequences of M without performing exact calculations’