Robert Solow used to tell his students that there were two kinds of theorists: those who like to generalize, and those who like to look for illuminating special cases. I fall very strongly into the latter camp. Indeed, I have elevated the creation of special cases into a sort of personal art form. In constant-returns models, it is often possible once you have made the big untrue assumptions up front to derive results of considerable generality. For example, the Heckscher-Ohlin-Samuelson model does not depend on any assumptions about the degree of substitutability between capital and labor. You may want to look at, say, a Leontief or a Cobb-Douglas technology as an interesting example, but you don't have to. In increasing-returns models, by contrast, there are very few general results. Even with two goods, two countries, and one factor of production one easily bogs down in a complex taxonomy. So what do you do?
My answer has been to rely heavily on those suggestive special cases. The process works like this: start with an informal verbal story, often one drawn from casual empiricism or from non-mainstream economic literature. Then try to build the simplest possible model that will illustrate that story. In the course of the model-building the story tends to change along with your intuition, but at the end of the process you have a simple model that is a very special case, but that makes a lot of intuitive sense and effectively gives you a language to discuss things that previously were off limits.
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