Economic methodology

Scope

General methodological issues include similarities and contrasts to the natural sciences and to other social sciences and, in particular, to:

• the definition of economics

• the scope of economics as defined by its methods

• fundamental principles and operational significance of economic theory• John R. Hicks, 1939. Value and Capital: An Inquiry into Some Fundamental Principles of Economic Theory. • Terence W. Hutchison, 1938. The Significance and Basic Postulates of Economic Theory. • Martin Hollis and Edward J. Nell, 1975. Rational Economic Man, ch. 3,4,5 and 7. Cambridge University Press. • Paul A. Samuelson, 1947. Foundations of Economic Analysis. • Richard G. Lipsey, 2008. "positive economics". The New Palgrave Dictionary of Economics. 2nd Edition. Abstract. • Lawrence A. Boland, 2008. "instrumentalism and operationalism", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.

  • _____, 2003. The Foundations of Economic Method, 2nd Edition. Description and chapter links.

• methodological individualism versus holism in economics

• the role of simplifying assumptions such as rational choice and profit maximizing in explaining or predicting phenomena• Lawrence A. Boland, 2008. "assumptions controversy", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract. • Milton Friedman, 1953. "The Methodology of Positive Economics" in Essays in Positive Economics. • Paul A. Samuelson, 1963. "Problems of Methodology: Discussion", American Economic Review, 53(2) American Economic Review, pp. 231-236. Reprinted in J.C. Wood & R.N. Woods, ed., 1990, Milton Friedman: Critical Assessments, v. I, pp. 107-13. Preview. Routledge. • Stanley Wong, 1973. "The 'F-Twist' and the Methodology of Paul Samuelson", American Economic Review, 63(3) p p. 312-325. Reprinted in J.C. Wood & R.N. Woods, ed., Milton Friedman: Critical Assessments, v. II, pp. 224-43. • Shaun Hargreaves Heap, 2008. "economic man", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract. • Kenneth J. Arrow, [1987] 1989. "Economic theory and the hypothesis of rationality", in The New Palgrave: Utility and Probability, pp. 25-39. • Duncan K. Foley, 2004. "Rationality and Ideology in Economics", Social Research, pp. 329-342. Pre-publication version . • Thomas J. Sargent, 1994. Bounded Rationality in Macroeconomics, Oxford. Description and chapter-preview 1st-page links. • Vernon L. Smith, 2008. Rationality in Economics: Constructivist and Ecological Forms, Cambridge. Description/contents links and preview.

• descriptive/positive, prescriptive/normative, and applied uses of theory

• the scientific status and expanding domain of economics• Edward P. Lazear, 2000. "Economic Imperialism", Quarterly Journal of Economics, 115(1), pp. 99-146. • George J. Stigler, 1984. "Economics—The Imperial Science?" Scandinavian Journal of Economics, 86(3), p p. 301-313. • Ben Fine, 2000. " Economics Imperialism and Intellectual Progress: The Present as History of Economic Thought?" History of Economics Review, 32, pp. 10-36 . • Jack Hirshleifer, 1985. "The Expanding Domain of Economics", American Economic Review, 75(6), pp. 53-68 (press +). Reprinted in Jack Hirshleifer, 2001, The Dark Side of the Force: Economic Foundations of Conflict Theory, ch.14, pp. 306- 42. • Gary S. Becker, 1976. The Economic Approach to Human Behavior. Description and preview. • _____, 1992. "The Economic Way of Looking at Life." Nobel Lecture link, also in 1993, Journal of Political Economy, 101(3), pp. 383-409.

• issues critical to the practice and progress of econometrics• Kevin D. Hoover, 2008. "causality in economics and econometrics", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract and galley proof. • H. Wold 1954. "Causality and Econometrics", Econometrica, 22(2), p p. 162-177. • C. W. J. Granger and P. Newbold, 1974. "Spurious Regressions in Econometrics", Journal of Econometrics, 2(2), pp. 111-120. • David F. Hendry, 1980. "Econometrics — Alchemy or Science?" Economica, N.S., 47(188), pp. 387-406. • _____ 2001a. "Achievements and Challenges in Econometric Methodology", Journal of Econometrics, 100(1), pp. 7-10. PDF, pp. 1-4 . • _____, 2001b. Econometrics: Alchemy or Science Essays in Econometric Methodology, 2nd Edition. Oxford. Description and contents. Review in the Economic Journal. • Edward E. Leamer, 1983. "Let's Take the Con Out of Econometrics", American Economic Review, 73(1), pp. 31-43. • Christopher A. Sims, 1980. "Macroeconomics and Reality", Econometrica,48, No. 1, pp. 1-48 . • Fischer Black, 1982. "The Trouble with Econometric Models", Financial Analysts Journal, 38(2), pp. 29-37. Reprinted in Black, 2009, Business Cycles and Equilibrium, Wiley. Updated version, pp. 135 - 150. • From Truman F. Bewley, ed., 1987. Advances in Econometrics: Fifth World Congress, Cambridge v. 2: Edward E. Leamer, "Econometric Metaphors", pp. 1- 28. David F. Hendry. "Econometric Methodology: A Personal Perspective", pp. 29- 42. • P.C.B. Phillips, 1988. "Reflections on Econometric Methodology", Economic Record, 64(4), pp. 344–359. Abstract. • David F. Hendry, Edward E. Leamer, and Dale J. Poirier, 1990. "The ET Dialogue: A Conversation on Econometric Methodology", Econometric Theory, 6(2), pp. 171-261. • Deirdre N. McCloskey and Stephen T. Ziliak, 1996. "The Standard Error of Regressions", Journal of Economic Literature, 34(1), pp. 97–114. • Kevin D. Hoover and Mark V. Siegler, 2008. "Sound and Fury: McCloskey and Significance Testing in Economics", Journal of Economic Methodology, 15(1), pp. 1–37; McCloskey and Ziliak, "Signifying Nothing: Reply to ..." [preprint] and Hoover and Siegler, link|date=November 2023 |bot=InternetArchiveBot |fix-attempted=yes }} "... Rejoinder to ..., pp. 39–68; • Edward J. Nell and Karim Errouaki, 2011. Rational Econometric Man, Part I and ch. 10. Edward Elgar.

• the balance of empirical and philosophical approaches• Mark Blaug, 2007. "The Social Sciences: Economics", Postwar developments, Methodological considerations in contemporary economics, The New Encyclopædia Britannica, v. 27, pp. 346-47. • Edward J. Nell (2004) "Critical Realism and Transformational Growth." In Transforming Economics. Edited by P. Lewis. London: Routledge.76-95. • Frank H. Knight, 1924. "The Limitations of Scientific Method in Economics", in The Trend of Economics, R.G. Tugwell, ed., pp. 229-67. Reprinted in Frank H. Knight, 1935 [1997], The Ethics of Competition, pp. 97- 139. •Daniel M. Hausman, 1983. "The Limits of Economic Science", in The Limits of Lawfulness: Studies on the Scope and Nature of Scientific Knowledge, N. Rescher, ed. Reprinted in D.M. Hausman, 1992, Essays on Philosophy and Economic Methodology, pp. 99-108.

  • Ludwig von Mises, 1949. Human Action. • Bruce Caldwell, [1987] 2008. "positivism", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.

• the role of experiments in economics

• the role of mathematics and mathematical economics in economics• W. Stanley Jevons, 1879. The Theory of Political Economy, 2nd ed., ch. I, "Introduction", pp. 1-29. • Paul A. Samuelson, 1952. "Economic Theory and Mathematics — An Appraisal", American Economic Review, 42(2), pp. 56-66. • D.W. Bushaw and R.W. Clower, 1957. Introduction to Mathematical Economics, pp. vii-viii and ch. 1, pp. 3-8. • Gérard Debreu, ([1987] 2008). "mathematical economics", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract. (First published with revisions from 1986, "Theoretic Models: Mathematical Form and Economic Content", Econometrica, 54(6), pp. 1259-1270.) • _____ 1991. "The Mathematization of Economic Theory", American Economic Review, 81(1), pp. 1-7. • Robert W. Clower, 1994. "Economics as an Inductive Science", Southern Economic Journal, 60(4), pp. 805-814. • _____, 1995. "Axiomatics in Economics", Southern Economic Journal, 62(2), pp. 307-319. • Mark Blaug, 2003. "The Formalist Revolution of the 1950s", Journal of the History of Economic Thought, 25(2), pp. 145-156. Abstract. Reprinted in Warren J. Samuels, et al., ed., 2003, A Companion to the History of Economic Thought, Wiley, pp. 395- 409. • _____,

1998. "Disturbing Currents in Modern Economics", Challenge, 41(3), pp. 11-34. Reprint. • Paul Krugman, 1998, "Two Cheers for Formalism", Economic Journal, 108(451), pp. 1829-1836. • Terence Hutchison, 2000. On the Methodology of Economics and the Formalist Revolution, Edward Elgar. Description and preview. • E. Roy Weintraub, 2008. "mathematics and economics", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract. • _____, 2002. How Economics Became a Mathematical Science, Duke University Press. Description , preview, and review extract. • Kenneth J. Arrow, 1951. Social Choice and Individual Values. • Amartya K. Sen, 1970 [1984]. Collective Choice and Social Welfare . • _____, 2008. "social choice", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.

• the writing• William Thomson, 1999. "The Young Person's Guide to Writing Economic Theory", Journal of Economic Literature, 37(1), pp. 157-183. • _____, 2001. A Guide for the Young Economist: Writing and Speaking Effectively about Economics. Chapter-preview links.
  • Eric Rasmusen, 2001. "Aphorisms on Writing, Speaking, and Listening", in E. Rasmusen, ed., Readings in Games and Information, pp. 389-420. PDF. • Donald McCloskey, 1985. "Economical Writing", Economic Inquiry, 23(2), pp. 187-222. • David N. Laband and Christopher N. Taylor, 1992. "The Impact of Bad Writing in Economics", Economic Inquiry, 30(4), pp. 673-688. http://onlinelibrary.wiley.com/doi/10.1111/j.1465-7295.1992.tb01289.x/abstract. and rhetoric of economics
• the relation between theory, observation, application, and methodology in contemporary economics.

Economic methodology has gone from periodic reflections of economists on method to a distinct research field in economics since the 1970s. In one direction, it has expanded to the boundaries of philosophy, including the relation of economics to the philosophy of science and the theory of knowledge. In another direction of philosophy and economics, additional subjects are treated including decision theory and ethics.

Notes

References

• John Bryan Davis, D. Wade Hands, Uskali Mäki (1998). Handbook of Economic Methodology, E. Elgar
• Hands, D. Wade, ed. (1993). The Philosophy And Methodology Of Economics, Duke University
• Hausman, Daniel M. (1984). The Philosophy of Economics: An Anthology. New York: Cambridge University Press,
• Boland, L. (1982) The Foundations of Economic Method, London: Geo. Allen & Unwin.
• Boland, L. (1989) The Methodology of Economic Model Building: Methodology after Samuelson, London: Routledge.
• Boland, L. (1997) Critical Economic Methodology: A Personal Odyssey, London: Routledge
• Boland, L. (2003) The Foundations of Economic Method: A Popperian Perspective, London: Routledge
• D.N. McCloskey (1983). The Rhetoric of Economics, Univ of Wisconsin Press, 1998
• Daniel M. Hausman (1992). Essays on Philosophy and Economic Methodology, Cambridge University Press, 1992
• Nell, E.J. and Errouaki, K. (2011) Rational Econometric Man. Edward Elgar.
• Düppe, T. (2011). How Economic Methodology Became a Separate Science, Journal of Economic Methodology, 18 (2): 163-176.

References

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