From what I know this seems to be different than the dispensations touted in dispensationalism or the one covenant of grace in covenant theology.
Brian Rosner's definition of biblical theology: it's the theological interpretation of Scripture in and for the church. It proceeds with history and literal sensitivity and seeks to analyze and synthesize the Bible's teaching about God and his relations to the world on its own terms, maintaining sight of the Bible's overarching narrative and Christocentric focus.
Biblical theology must come before all other theology because you cannot properly do other theologies until you understand what the Bible is all about.
Systematic theology seeks to apply Scripture to all areas of life. Hence you cannot properly do systematic theology if you don't understand how all Scripture fits together. Systematic theology must be grounded in biblical theology.
Systematic theology aides us in our apologetics. So rightly understood, apologetics is a subset of systematic theology.
Biblical theology then is primarily a hermeneutical discipline and assists our systematic theology.
HERMENEUTICAL BASIS: BEING "BIBLICAL" IN OUR READING OF SCRIPTURE AND THEOLOGY
To properly interpret and apply Scripture and to be biblical in theology we must take seriously what Scripture claims to be and we must interpret Scripture in light of what it is: God's unfolding revelation across time.
The Scriptural Claim for Itself: Scripture's Self-Attestation
Scripture is God's Word written. It is the product of God's might action through the Word and by the Holy Spirit whereby human authors freely wrote exactly what God intended to be written and without error.
There is unity between the testaments even though there is diversity. The unity comes from the fact that Scripture is unified in its redemptive plan as it unfolds progressively throughout history and time.
There is a "fuller meaning" when it comes to Scripture or the sensus plenior. What this means is that the authors of Scripture did not exhaustively know what they were writing about. It's only through later divine revelation that their writings were expounded upon. What they knew was true but not the final word on the subject. God did not disclose all the details at once. Thinking back to Genesis 3:15, even the gospel then was minimal even though true. Through the covenants, we come to know more about hat God was doing. Again, revelation is progressive.
Grammatical-historical exegesis needs to be set inside the bigger biblical canon. It's not enough to just know the local situation. You must know prior and after the local situation to see where revelation was in the past and where it was going in the future.
Interpreting Scripture According to What It Is
(1). Scripture Is A Word-Act Revelation - this is God's own interpretation of His redemptive acts
(2). Scripture Is A Progressive Revelation - that is, God's redemptive acts happened over time thus His revelation happened over time
Michael Horton says that most biblical theology is the one that is redemptive-historical-eschatalogical. Scripture has an end in mind as well. Therefore, all of Scripture must be interpreted as it relates to the whole.
Putting Together The Canon: The Three Horizons of Biblical Interpretation
In regards to the covenants, we must understand each one in its own context. But then we must ask what came before it and what came after it.
(1). Context, Context, Context
(a). We must consider the textual horizon or the immediate context. Using the grammatical-historical method of interpretation begins here but does not stop here.
(b). We must consider the epochal horizon. We must interpret these texts in light of where we are in God's unfolding plan of redemption. Where are we in progressive revelation? What came before this? What came after? This is why we see later authors adding to what has been already stated. They are not arbitrarily interpreting or applying texts. They are adding to the fuller meaning and we must take that into account when dealing with any text.
(c). We must consider the canonical horizon. We must see the unity of all Scripture.
To be biblical in our theology and reading of Scripture we must then use a grammatical/literary-historical-canonical method of interpreting Scripture.
One of the ways that God has glued together the epochs of Scripture is through the promise-fulfillment motif. This is tied to the covenants which are promises. Thus, through the covenants we see God's unity and diversity in the redemptive plan. We see the promises God made and their fulfillment in Christ. The culmination of this redemptive plan is in the New Covenant and what Christ has done for us in finality in the final state.
(2). The Nature And Importance of Typology
Typology has an intertextual framework whereas allegory has an extratextual framework. One is rooted in Scripture, the other is not.
Typology is symbolism rooted in historical and textual realities.
Typology is prophetic and predictive and thus divinely given and intended.
Types are repeated and fulfilled in Christ. Adam, Noah, Abraham, Israel and David were all types of Christ who was the fulfillment or anti-type. He perfectly did what they all failed to do and they all pointed to Him.
Christ is the true Israel and by virtue of our union with Him we become the Israel of God and thus receive the new covenant promises made to Israel/Judah.
Types always have a lesser to greater quality about them--a fortiori.
Types had a limited scope and timespan. When they were fulfilled in Christ they had their telos. There is a legitimate discontinuity between the old and new.
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