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Economics: Between Prediction and Criticism

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We suggest that one way in which economic analysis is useful is by offering a critique of reasoning. According to this view, economic theory may be useful not only by providing predictions, but also by pointing out weaknesses of arguments. It is argued that, when a theory requires a non-trivial act of interpretation, its roles in producing predictions and offering critiques vary in a substantial way. We offer a formal model in which these different roles can be captured.

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  • Itzhak Gilboa & Andrew Postlewaite & Larry Samuelson & David Schmeidler, 2014. "Economics: Between Prediction and Criticism," Cowles Foundation Discussion Papers 1958, Cowles Foundation for Research in Economics, Yale University, revised Feb 2016.
    • Handle: RePEc:cwl:cwldpp:1958
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    1. John B. Davis & D. W. Hands & Uskali Mäki (ed.), 1998. "The Handbook of Economic Methodology," Books, Edward Elgar Publishing, number 741.
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    8. Hausman,Daniel M., 1992. "The Inexact and Separate Science of Economics," Cambridge Books, Cambridge University Press, number 9780521425230, December.
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    Cited by:

    1. Itzhak Gilboa & Andrew Postlewaite & Larry Samuelson & David Schmeidler, 2019. "What are axiomatizations good for?," Theory and Decision, Springer, vol. 86(3), pages 339-359, May.
    2. Thomas J. Sargent, 2015. "Robert E. Lucas Jr.'s Collected Papers on Monetary Theory," Journal of Economic Literature, American Economic Association, vol. 53(1), pages 43-64, March.

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    More about this item

    Keywords

    Methodology; Models; Economic modeling;
    All these keywords.

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology

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