I came accross this question by Lars Syll, and it overlapped with what i have thought for a while and reminded me of the many academic debates I have had with Gideon Thuku at Karatina University. There are simply too many models in economics that dont appear to work very well, even with modern refinements.
In Dani Rodrik’s Economics Rules it is argued that ‘the multiplicity of models is economics’ strength,’ and that a science that has a different model for everything is non-problematic since "economic models are cases that come with explicit user’s guides — teaching notes on how to apply them. That’s because they are transparent about their critical assumptions and behavioral mechanisms." Is it really true.
Take the case of DGSE and its failure to explain involuntary unemployment, its defenders maintain that later ‘successive approximations’ and elaborations — especially newer search models — manage to do just that. However, one of the more conspicuous problems with those ‘solutions,’ is that they are as a rule constructed without seriously trying to warrant that the model assumptions and results are applicable in the real world.
Good old Caital asset pricing model CAPM suffers even more here.
Is economics as a discipline headed in the wrong direction?
The reason for the large number of models in the economy is explained by the high chaos of economic systems and the presence of a subjective factor.
But even so, a large number of models are justified only if they are used for mutual calibration, for validation.
In my opinion, an infinite number of models indicate a crisis in economic science, that a transition to another methodological basis is necessary.
A new paradigm of economic science should appear, which can become the basis for the formation of generalizing models, in which case all currently existing models will become only special cases.
Perhaps, an entropic approach, proposed by the followers of synergetics, can perform as such paradigm.
The existence of a large number of model signifies the development & evolution of the subject. As older models failed to work well or were not applicable to real life situations, due to their unrealistic assumptions, as in CAPM, newer ones evolved. The only big problem was that the newer ones were just as inapplicable, unrealistic & non-generalizable, workable only under special, unrealistic assumptions.
Like medicine or pedagogics, economics is a profession, based on accumulated practical experiences, mainly for private wealth maximization via credit by collaterals like land and real estate. Economics is not a science, the many models do represent the many policy options on the broad political spectrum; the application of some outdated maths and physics just makes these options looking more 'abstract', i.e. the accounts of society (land value, monetary tools, taxation) do matter. When the 'external' selection pressure of human systems evolution on this planet will physically increase the 'economic pains' to an unsustainable limit, some scientific progress will be required as a survival strategy for an earth sharing economy of mutual existential guarantees.
"Is economics as a discipline headed in the wrong direction ?"
It was never headed in the right direction ever since we started canvasing abstract theories of Adam Smith.
I will be honest here. I am a technology guy turned economics student. So, comparison of Engineering discipline with a so called Science is natural. In computer programming you are always driven by logic and strive to achieve the output that is actually logical and works in the real world. As a technologist - if your code has lot of bugs the product will not move ahead.
However, in economics - if a mathematical model is not realworld - the economists would introduce assumptions and adjustments,Standard errors to justify the model. Observations and statistics are manipulated to support conclusions or theories based on bias, personal agendas and in some cases the reputation of the economist , which muddies the waters in finding what is accurate and what is not.
I am not against economics as a subject but there are baffling logical fallacies. Trillions of dollars have been spent as bailout packages due to the ever adjusting mathematical models that re just trying to create a logical facade over fluffy theories.
There are numerous examples when you dig deep and start thinking philosophically if economics as a discipline really has the precision and accuracy to tell us how the economies of the world rotate and revolve.
I may not be a veteran in this field and you have all the right to laugh out loud on my views but I would appreciate if our models don't have the assumptions like "a crow is more beautiful than a peacock". Economists can be more real world while taking assumptions about normality of data and pragmatism with real world.