Abstract

The main thesis of this paper is that methodological discussion of economics should extend its focus to include not only theory-testing, as at present, but also theory-building, an important topic that is worthy of detailed discussion. In addition, the communication between the theory-building part of theorizing and the theory-testing part of it should also be paid greater attention. Furthermore, this paper also argues that theory-testing should be interpreted in the context of the structuralist rather than the associationist view. And, finally, an example of international trade theory development is provided to illustrate that, instead of being regarded as a deductive-nomological explanation, an economic explanation should be interpreted as a causal structuralist explanation.

Key words: regularity, deductive-nomological explanation, causal structure, international trade theory, model manipulation, economic law