Economic experimentation and accountability

Even mainstream economists such as Greg Mankiw recognizes the difficulty (some would say unsuitability) of the scientific method in economics.

Accountability in effectiveness of stimulus?

If the right effect happens, economists and politicians congratulate themselves. If the expected effect doesn’t happen, economists can claim the baseline was wrong 😉

This is exactly why the method of natural sciences (falsifiable experiments) doesn’t work in economics. There are too many variables which cannot be isolated.

 

On the other hand, Austrian economists acknowledge this from the start. A logically deduced theory cannot be confirmed or validated by experiment. It can only be invalidated thru logic.

That’s why, in their approach to historical economics, the theory informs the facts, rather than the facts informing the theory.

 

Advertisements

Tags:

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: