The Inexact and Separate Science of Economics

A comprehensive overview of theoretical economics, its distinctive modeling strategy, applicability, and empirical support.

Daniel M. Hausman (Author)

9781009320290, Cambridge University Press

Hardback, published 8 June 2023

450 pages
23.5 x 15.9 x 3.5 cm, 0.92 kg

Is economics a science? What distinguishes it from other sciences, both natural and social? Like many of the natural sciences, its theories are mathematically complex. Yet, like the social sciences, its 'laws' are largely everyday generalizations. Can such generalizations, which are far from universal truths, constitute a science? Does economics have a distinctive method? The first edition answered these and other questions about the scientific status of economics and its underlying methodology. In this fully updated new edition, Dan Hausman reflects on developments in both economics and the philosophy of economics over the last thirty years. It includes a new chapter on the methodology of macroeconomics, an updated discussion on the use of models, and new discussions causal inference and behavioural economics and their implications for theory appraisal. It is the perfect choice for a new generation of students studying the methodology of modern economics.

Part I. Introduction: Content, Structure and Strategy of Mainstream Economics: 1. Rationality, preferences and utility theory
2. Demand and consumer choice
3. Theory of the firm and general equilibrium
4. Equilibrium theory and normative economics
5. Equilibrium theory and macroeconomic models
6. Models and theories in economics
7. The structure and strategy of economics
8. Overlapping generations: a case study
Part II. Theory Assessment: 9. Inexactness in economic theory
10. Mill's deductive method and the assessment of economic hypotheses
11. Methodological revolution
12. Karl Popper, Imre Lakatos: Falsificationism and research programs
13. The inexact deductive method
14. Casting off dogmatism: the case of preference reversals
Part III. Conclusion: 15. Economic methodology
16. Conclusions.

Subject Areas: Economic theory & philosophy [KCA]