Knowra Economic methodology Economic methodology Economic methodology studies the methods, assumptions, and standards used to construct and assess explanations in economics. It examines how economic theories relate to evidence, models, and policy claims.
Philosophy of science : The philosophical study of scientific knowledge, methods, explanations, and standards of evidence. Economic methodology applies broad questions about scientific reasoning to economics.
Instrumentalism : The view that theories are tools judged chiefly by their usefulness, often by predictive performance. It contrasts with demands that economic assumptions describe actual behavior or mechanisms.
John Stuart Mill : A nineteenth-century philosopher and economist whose work addressed logic, social science, and political economy. His account of deductive and inductive reasoning influenced early discussions of economic method.
Econometrics : The application of statistical methods to economic data to estimate relationships and test hypotheses. It supplies many of the empirical techniques whose assumptions methodology scrutinizes.
Prediction versus explanation : A distinction between forecasting outcomes and identifying why those outcomes occur. Economic methodology asks whether accurate forecasts can compensate for weak causal explanations.
Economic model : A simplified representation of economic agents, institutions, or processes used to analyze relationships and outcomes. Methodological debates often concern what models reveal despite their simplifications.
Realism (philosophy of science) : The view that successful scientific theories can describe real, often unobservable, structures and processes. Economic realists challenge approaches that excuse unrealistic assumptions solely by predictive success.
John Neville Keynes : A British economist and logician who wrote on the scope and method of political economy. His 1891 book systematized distinctions among positive, normative, and applied economics.
Randomized controlled trial : An experiment that randomly assigns participants to treatment and control groups to estimate causal effects. Its use in development economics raises questions about external validity and mechanism.
Causal mechanism : A process through which an initiating factor produces an outcome. Mechanism-based accounts offer one answer to what makes an economic explanation adequate.
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