Fixing the reference of economic theories
Theorization in economics is about real-concrete systems, processes, or phenomena, which must be identified before any idealized model of the same is built. Econometricians call these real concrete entities ‘data generation processes’ (DGP), and use this term in order
to designate the phenomenon of interest which a theory purports to explain.
The concept is used in order to emphasize the intended scope of the theory as well as the source of the observable data. Defined this way, the concept of the actual DGP might be a real observable phenomenon or an experimental-like situation depending on the intended scope of the theory.(Spanos 1986: 661)
I have designated the dgps by means of the Greek letter σ. The intended scope of the theory is historically fixed by the community of scientists as a certain timedependent set {σ}, which is classified into types σ1,..., σn of real-concrete phenomena. Each of these types, in turn, is represented by partial potential models collected in the set I = {Bσ,..., Bσ g of intended applications of the theory.
The reference to the DGPs is basically fixed by a general term expressing a certain Gedankenkonkretum, not by the theoretical models. This means that we do have, indeed, a theory-independent way of referring to the phenomena the theory intends to deal with.
6.2