Economic Methodology

Introduction

Textbook
Economic Methodology
Understanding Economics as a Science

Descriptive - Prescriptive
Descriptive methodology
 = positive methodology: how it is
Positus (n ponere = put, place) e.g. position

Prescriptive methodology
 = normative methodology: how it ought to be
Norm

Received View of Science

Lecture 1

Logical Positivism
Logicism
 Scienific language is an extension of logic

Positivism = Empiricism
 Knowledge arises out of sense experience

Normative methodology
Demarcate

science

pseudo-science

Immanuel Kant (1724-1804)

Critique of Pure Reason (1781) Analytic propositions Synthetic propositions
 A postiori  A priori

Analytic propositions
Tautology = true by definition e.g. All bachelors are unmarried Mathematics + Logic e.g. 1+1 = 2 ApA

Synthetic propositions
Not analytic: other source to find out whether proposition is true or not a posteriori: empirical research e.g. The lecturer wears glasses.

Synthetic a priori
Universal true e.g. Newtons law F = mva Space is Euclidean A+B+C = 180r Later pervert a priori: e.g. Arier ist Uebermensch

Developments in Mathematics
Non-Euclidian spaces

Developments in Physics
Albert Einstein Relativity Theory: Newton Laws Euclidean Space

Back to Demarcation
No synthetic a priori Synthetic properties must be a posteriory Propositions must be empirically verifiable or analytical (tautological)

Explanation
Answer to a why-question Scientific explanation covered by law(s) deduced from law(s)

Deductive-nomological model
Explanans: Laws Conditions Explanandum

Symmetry thesis
Model of Explanation = Model of Prediction Laws Conditions ? Laws are essential for scientific explanation and scientific prediction

Law
Empirical regularity Reguirements: Not accidental but universal No restrictions, no exceptions

Problem of Induction
all swans are white
1697 Western Australia

Problem of Laws
Laws are NOT empirically verifiable! Laws are no scientific propositions No laws, no scientific explanations, no scientific predictions Only scientific descriptions

Two alternatives:
Instrumentalism Laws are like instruments, therefore assess their usefulness (in explanation or prediction) Confirmationism Laws are no certain knowledge, so express their likelihood. The more they are confirmed the higher their probability