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Economic methodology
Economic methodology
is the study of methods, especially the scientific method, in relation to economics, including principles underlying economic reasoning.[1] In contemporary English, 'methodology' may reference theoretical or systematic aspects of a method (or several methods). Philosophy and economics
Philosophy and economics
also takes up methodology at the intersection of the two subjects.

Contents

1 Scope 2 See also 3 Notes 4 References 5 External links

Scope[edit]

This section is in a list format that may be better presented using prose. You can help by converting this section to prose, if appropriate. Editing help is available. (July 2012)

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

the definition of economics[2] the scope of economics as defined by its methods[3] the methodological and empirical limitations of analysing economic phenomena[4] fundamental principles and operational significance of economic theory[5] methodological individualism versus holism in economics[6] the role of simplifying assumptions such as rational choice and profit maximizing in explaining or predicting phenomena[7] descriptive/positive, prescriptive/normative, and applied[8] uses of theory[9] the scientific status[10] and expanding domain of economics[11] issues critical to the practice and progress of econometrics[12] the balance of empirical and philosophical approaches[13] the role of experiments in economics[14] the role of mathematics and mathematical economics in economics[15] the writing[16] and rhetoric of economics[17] the relation between theory, observation, application, and methodology in contemporary economics.[18]

Economic methodology
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[19] In another direction of philosophy and economics, additional subjects are treated including decision theory and ethics.[20] See also[edit]

Economic systems Methodology of econometrics Model (economics)

Notes[edit]

^ :Press + button to enlarge small-text links below.    • Roger E. Backhouse, 2008. "methodology of economics", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.    • Lawrence A. Boland, 1987. "methodology", The New Palgrave: A Dictionary of Economics, v. 3, pp. 455-56.    • Daniel M. Hausman, 1989. "Economic Methodology in a Nutshell", Journal of Economic Perspectives, 3(2), pp. 115-127.    • Kevin D. Hoover, 1995. "Review Article: Why Does Methodology Matter for Economics?" Economic Journal, 105(430), pp. 715-734. ^ • John Stuart Mill, 1844. "On the Definition of Political Economy; and on the Method of Investigation Proper to It", Essay V, in Essays on Some Unsettled Questions of Political Economy.    • Roger E. Backhouse and Steven Medema, 2008. "economics, definition of", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.    • _____. 2009. "Retrospectives: On the Definition of Economics", Journal of Economic Perspectives, 23(1), pp. 221–33 (close Bookmarks tab) Abstract. ^ John Neville Keynes, 1891. The Scope and Method of Political Economy. Annotated chapter links. 4th ed., 1917 [1999]. Full Contents. ^ Alexander Krauss, 2016. The scientific limits of understanding the (potential) relationship between complex social phenomena: the case of democracy and inequality. Journal of Economic Methodology. Vol. 23(1). ^ • 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. ^ • Kaushik Basu, 2008. "methodological individualism", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.   • Edward J. Nell, 1998. General Theory of Transformational Growth, Part I. Cambridge University Press.    • Harold Kincaid, 2008. "individualism versus holism", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.    • F.A. Hayek, 1948. Individualism and Economic Order. Chapter-preview links.    • George J. Stigler
George J. Stigler
and Paul A. Samuelson, 1963. "A Dialogue on the Proper Economic Role of the State." Selected Papers, No. 7. Archived 2010-05-27 at the Wayback Machine. University of Chicago Graduate School of Business.    • James M. Buchanan, 1990. "The Domain of Constitutional Economics", Constitutional Political Economy, 1(1), pp. 1-18, adapted as "Constitutional Political Economy" in C. K. Rowley and F. Schneider, ed., 2004, The Encyclopedia of Public Choice, v. 2, pp. 60-67.    • Kenneth J. Arrow, 1994. "Methodological Individualism and Social Knowledge", American Economic Review, 84(2), pp. 1-9.    • Richard H. Thaler
Richard H. Thaler
and Cass R. Sunstein, 2008. Nudge: Improving Decisions about Health, Wealth, and Happiness. Yale. Description and preview.    • Shiozawa, Y. 2004 Evolutionary Economics
Economics
in the 21st Century: A Manifest, Evolutionary and Institutional Economics
Economics
Review, 1(1): 5-47. ^ • 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
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. ^ • David Colander
David Colander
(1992). "Retrospectives: The Lost Art of Economics", Journal of Economic Perspectives, 6(3), pp. 191-198.    • John Neville Keynes, 1891. The Scope and Method of Political Economy. ch. I-II. Annotated chapter links. 4th ed., 1917 [1999]. Full Contents. ^ • Richard G. Lipsey, 2008. "positive economics." The New Palgrave Dictionary of Economics. 2nd Edition. Abstract.    • Amartya Sen, 1980. "Description as Choice", Oxford Economic Papers, N.S., 32(3), pp. 353-369. Reprinted in Sen, 1982, Choice, Welfare
Welfare
and Measurement, Oxford, Basil Blackwell. Chapter-preview link, p. 432-449.    • John Neville Keynes, 1891. The Scope and Method of Political Economy. ch. I, III. Annotated chapter links. 4th ed., 1917 [1999]. Full Contents.    • Colin F. Camerer, 2003. Behavioral Game Theory: Experiments in Strategic Interaction, pp. 5-7 (scroll to at 1.1 What Is Game Theory Good For?).    • Kenneth E. Boulding, 1969. " Economics
Economics
as a Moral Science", American Economic Review, 59(1), pp. 1–12.    • A. B. Atkinson, 2009. " Economics
Economics
as a Moral Science", Economica, 76(1), pp. 791–804.    • " Economics
Economics
as a Moral Science" session, 2011. American Economic Review, 101(3), article-abstract links. ^ • Lionel Robbins, 1932. An Essay on the Nature and Significance of Economic Science.    • Richard G. Lipsey, 2009. "Some Legacies of Robbins’ An Essay on the Nature and Significance of Economic Science", Economica, 76(302), pp. 845-56 (press + button).    • Alexander Rosenberg (1983). "If Economics
Economics
Isn't Science, What Is It?" Philosophical Forum, 14, pp. 296-314. Reprinted in M. Martin and L. C. McIntyre (1996), Readings in the Philosophy of Social Science, pp. 661-674.    • Douglas W. Hands, 1984. "What Economics
Economics
Is Not: An Economist's Response to Rosenberg", Philosophy of Science, 51(3), p p. 495-503.    • Daniel M. Hausman, 1992. The Inexact and Separate Science of Economics. Description, to ch. 1 link, preview, and reviews, 1st pages: [1][2]. ^ • 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
Economics
Imperialism and Intellectual Progress: The Present as History of Economic Thought?" History of Economics
Economics
Review, 32, pp. 10-36 Archived 2012-04-26 at the Wayback Machine..    • 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. ^ • 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
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
Macroeconomics
and Reality", Econometrica,48, No. 1, pp. 1-48 Archived 2012-04-02 at the Wayback Machine..    • 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
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, "... Rejoinder to ..., pp. 39–68;    • Edward J. Nell and Karim Errouaki, 2011. Rational Econometric Man,Part I and ch. 10. Edward Elgar. ^ • 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
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. ^ • C.F. Bastable, [1925] 1987. "experimental methods in economics", i, The New Palgrave: A Dictionary of Economics, v. 2, p. 241.    • Vernon L. Smith, [1987] 2008a. "experimental methods in economics", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.    • _____, 2008b. "experimental economics", The New Palgrave Dictionary of Economics, 2nd Edition, Abstract.    • Herman O. Wold (1969). " Econometrics
Econometrics
as Pioneering in Nonexperimental Model Building", Econometrica, 37(3), p p. 369-381. ^ • 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
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
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
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
Economics
Became a Mathematical Science, Duke University Press. Description, preview, and review Archived 2011-09-28 at the Wayback Machine. extract.    • Kenneth J. Arrow, 1951. Social Choice and Individual Values.    • Amartya K. Sen, 1970 [1984]. Collective Choice and Social Welfare
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ISBN 0-444-85127-5.    • _____, 2008. "social choice", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract. ^ • 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. [3] ^ • D.N. McCloskey, 1983. "The Rhetoric of Economics", Journal of Economic Literature, 21(2), pp. 481-517.    • _____, [1985] 1998, 2nd ed. The Rhetoric of Economics. Chapter-preview links.    • Roger Backhouse, T. Dudley-Evans, and Willie Henderson, 1993. "Exploring the Language and Rhetoric of Economics", in Willie Henderson et al., Economics
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and Language, pp. 1-20 (preview)    • John Kenneth Galbraith, 1962. "The Language of Economics", Fortune, LXVI(6), Dec. pp. 12-30, 169, 31. Excerpt at [CNN] "FORTUNE: John Kenneth Galbraith, excerpts from his writing", May 17, 2006. ^ • Wassily Leontief, 1971. "Theoretical Assumptions and Nonobserved Facts", American Economic Review, 61(1), pp. 1-7. Reprinted in W. Leontief, 1977, Essays in Economics, v. 1, ch. III, pp. 24-34.    • Mark Blaug, 1992. The Methodology of Economics: Or How Economists Explain, 2nd ed., Cambridge. Description and Preview.    • Roger Backhouse and Mark Blaug, 1994. New Directions in Economic Methodology, Routledge. Contents preview.    • P.A.G. van Bergeijk et al., 1997. Economic Science and Practice: The Roles of Academic Economists and Policy-Makers. Description & preview links.    • D. Wade Hands, 2001. Without Rules: Economic Methodology and Contemporary Science Theory, Oxford. Description and contents preview.    • Christopher A. Sims, 1996. " Macroeconomics
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References[edit]

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, ISBN 052145929X 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.

External links[edit]

Journal of Economic Methodology - page @ EconPapers Daniel M. Hausman, Philosophy of Economics
Economics
(with focus on methodology), Stanford Encyclopedia of Philosophy Milton Friedman, "The Methodology of Positive Economics"

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