ABSTRACT
To explain is to clarify, to render intelligible, and to provide reason for. In economics, the object of explanation has always been observable economic behavior, where the behavior in question is that of human beings as it arises either in isolation or in the context of the activity of economic institutions. And in recent times, the means of explanation in economics has largely come to consist of the construction of (usually mathematical) models in which the observed behavior under scrutiny is derived, at least in principle, from initial assumptions. It is an obvious consequence of the combination of these latter facts concerning practice in economics with the meaning of explanation, that for models to have relevance for economic explanation they must have a basis in human experience. That is, they have to reflect or be consistent with the standards that real people employ in arriving at their own personal perceptions, judgments, and actions.
