Forward-looking contrast explanation, illustrated using the Great Moderation

Abstract

In Reorienting Economics, Lawson introduces the concept of contrast explanation, initially defined using the question form 'why x, rather than y?' where it is a surprising or unexpected outcome that motivates the search for an explanation of the contrast. In the following paper I elaborate upon the initial question form, asking: 'why the perpetuation of y rather than an alternative possible x?' This question focuses on relative stability, but can be a sceptical or contrarian form. From a realist perspective, any stability expressed in events as regularity is highly conditional. As such, underlying the question form is an invitation to explore the instability or vulnerability of order with a view to the ways that order might break down. This motivates a forward-looking focus of investigation that is particularly appropriate for looking at systemic issues in economics. I use the global financial crisis to illustrate the potential here. Copyright , Oxford University Press.