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Macroeconomics: science or faith based discipline?

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  • Bill Russell

Abstract

Whether or not macroeconomics is a science depends on the scientific nature of macroeconomic theories and how the discipline responds when the empirical evidence fails to match the underlying assumptions and predictions of the theories. By way of an example, four conditions for macroeconomics to be a science are developed and used to examine the ‘modern’ theories of the Phillips curve. It is found that while the discipline in general maintains one condition it routinely violates the other three. This suggests the macroeconomics discipline has some way to go before it can call itself a ‘pure science’.

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File URL: http://www.dundee.ac.uk/media/dundeewebsite/economicstudies/documents/discussion/DDPE_276.pdf
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Bibliographic Info

Paper provided by Economic Studies, University of Dundee in its series Dundee Discussion Papers in Economics with number 276.

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Length: 33 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:dun:dpaper:276

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Postal: Dundee, DD1 4HN
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Web page: http://www.dundee.ac.uk/econman/
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Keywords: Methodology; Phillips curve; inflation; structural breaks; nonstationary data; macroeconomics;

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  1. Panzar, John C & Willig, Robert D, 1977. "Economies of Scale in Multi-Output Production," The Quarterly Journal of Economics, MIT Press, vol. 91(3), pages 481-93, August.
  2. Clarida, R. & Gali, J. & Gertler, M., 1999. "The Science of Monetary Policy: A New Keynesian Perspective," Working Papers 99-13, C.V. Starr Center for Applied Economics, New York University.
  3. Ricardo J. Caballero, 2010. "Macroeconomics after the Crisis: Time to Deal with the Pretense-of-Knowledge Syndrome," NBER Working Papers 16429, National Bureau of Economic Research, Inc.
  4. Harald Uhlig, 2010. "Economics and Reality," NBER Working Papers 16416, National Bureau of Economic Research, Inc.
  5. Howitt, Peter, 2012. "What have central bankers learned from modern macroeconomic theory?," Journal of Macroeconomics, Elsevier, vol. 34(1), pages 11-22.
  6. Perron, P, 1988. "The Great Crash, The Oil Price Shock And The Unit Root Hypothesis," Papers 338, Princeton, Department of Economics - Econometric Research Program.
  7. Baumol, William J, 1977. "On the Proper Cost Tests for Natural Monopoly in a Multiproduct Industry," American Economic Review, American Economic Association, vol. 67(5), pages 809-22, December.
  8. Russell, Bill & Chowdhury, Rosen Azad, 2013. "Estimating United States Phillips curves with expectations consistent with the statistical process of inflation," Journal of Macroeconomics, Elsevier, vol. 35(C), pages 24-38.
  9. Kalecki, Michal, 1971. "Class Struggle and the Distribution of National Income," Kyklos, Wiley Blackwell, vol. 24(1), pages 1-9.
  10. Bill Russell, 2007. "Non-Stationary Inflation and Panel Estimates of United States Short and Long-run Phillips curves," Dundee Discussion Papers in Economics 200, Economic Studies, University of Dundee.
  11. Bill Russell & Anindya Banerjee & Issam Malki & Natalia Ponomareva, 2010. "A Multiple Break Panel Approach To Estimating United States Phillips Curves," Dundee Discussion Papers in Economics 232, Economic Studies, University of Dundee.
  12. Hoover, Kevin D, 1984. "Two Types of Monetarism," Journal of Economic Literature, American Economic Association, vol. 22(1), pages 58-76, March.
  13. Hoover,Kevin D., 2001. "The Methodology of Empirical Macroeconomics," Cambridge Books, Cambridge University Press, number 9780521802727, December.
  14. Lucas, Robert E, Jr, 1973. "Some International Evidence on Output-Inflation Tradeoffs," American Economic Review, American Economic Association, vol. 63(3), pages 326-34, June.
  15. Gali, Jordi & Gertler, Mark, 1999. "Inflation dynamics: A structural econometric analysis," Journal of Monetary Economics, Elsevier, vol. 44(2), pages 195-222, October.
  16. Turvey, R, 1969. "Marginal Cost," Economic Journal, Royal Economic Society, vol. 79(314), pages 282-99, June.
  17. Kozicki, Sharon, 2012. "Macro has progressed," Journal of Macroeconomics, Elsevier, vol. 34(1), pages 23-28.
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