Why does evidence matter so little to economic theory?
pp. 395-407
in: Kees Doets, Daniele Mundici (eds), Structures and norms in science, Berlin, Springer, 1997Abstract
Let me begin with two apologies. First, this essay1 is not fully self-contained. It addresses shortcomings in the position I defend in my 1992 book, The Inexact and Separate Science of Economics, and in some parts it relies on arguments made there. Second, my title is misleading. It suggests that it is useful and sensible to generalize about economics as a whole. I doubt this. Economists do many different things. In parts of economics evidence matters as much as it possibly could anywhere. It would have been more accurate to give this paper the title, "Why Does Evidence Matter So Little to General Equilibrium Theory and Theoretical Orthodox Microeconomic Theory?" But that would have been a very long title. Let me call this branch of economics — that is, general equilibrium theory and theoretical orthodox microeconomics "equilibrium economics". The name may be confusing, because other economists are concerned with equilibria, too, but I cannot think of a better one. My question is: Why does evidence matter so little to equilibrium theory?