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.




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