There’s a nice post today (or yesterday, depending on what time zone your brain is in) by Rajiv Sethi on the effort to bring back non-equilibrium approaches to macroeconomics. It looks at the argument made by Tobin in the 1970s, Minsky’s oscillating financial instability model, as well as his own work.
I think the simplest way to put the question is to ask, what sciences should economics, given its subject matter, most resemble? Physics, with its immutable laws and extraordinarily precise measurement apparatuses? Not likely. How about biology, ecology and geology, with their messy, variegated objects of study, one-off cases, and path-dependence? This is where I would turn.
So how much equilibrium analysis do we find in these fields? The answer is, a little, but not much. Mostly there is a painstaking identification of discrete causal processes, each a challenge that can occupy a whole career, with little expectation that all of them will ever be fitted neatly into a single, all-explaining model. Economics would do well to follow this path.
For more detail on my take, look here.