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Crisis and methodology: some heterodox misunderstandings

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  • Kakarot-Handtke, Egmont

Abstract

Whether justified by the concrete circumstances or not, an economic crisis is, by simple association, taken as an implicit refutation of the invisible hand vision and the underlying theory. The fundamental heterodox critique locates the source of apparent theoretical difficulties at the level of methodology. Although acceptable in principle, this belief involves some actual misunderstandings with regard to the respective roles of deterministic laws and deductive reasoning. In order to clarify these, the present paper revisits some key episodes in the history of economic methodology.

Suggested Citation

  • Kakarot-Handtke, Egmont, 2012. "Crisis and methodology: some heterodox misunderstandings," MPRA Paper 43260, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:43260
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    File URL: https://mpra.ub.uni-muenchen.de/43260/1/MPRA_paper_43260.pdf
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    References listed on IDEAS

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    1. Roger E. Backhouse & Steven G. Medema, 2009. "Retrospectives: On the Definition of Economics," Journal of Economic Perspectives, American Economic Association, vol. 23(1), pages 221-233, Winter.
    2. J. M. Keynes, 1937. "The General Theory of Employment," The Quarterly Journal of Economics, Oxford University Press, vol. 51(2), pages 209-223.
    3. Weintraub, E. Roy, 1985. "Appraising General Equilibrium Analysis," Economics and Philosophy, Cambridge University Press, vol. 1(01), pages 23-37, April.
    4. Tomasson, Gunnar & Bezemer, Dirk J, 2010. "What is the Source of Profit and Interest? A Classical Conundrum Reconsidered," MPRA Paper 20320, University Library of Munich, Germany.
    5. Laidler,David, 1999. "Fabricating the Keynesian Revolution," Cambridge Books, Cambridge University Press, number 9780521641739, October.
    6. Joseph Stiglitz, 2011. "The Failure of Macroeconomics in America," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 19(5), pages 17-30, September.
    7. Sheila C. Dow, 2005. "Axioms and Babylonian thought: a reply," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 27(3), pages 385-391.
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    Cited by:

    1. Kakarot-Handtke, Egmont, 2003. "How to Get Rid of Demand–Supply–Equilibrium for Good," MPRA Paper 46917, University Library of Munich, Germany.
    2. Kakarot-Handtke, Egmont, 2013. "Toolism! A Critique of Econophysics," MPRA Paper 46630, University Library of Munich, Germany.
    3. Kakarot-Handtke, Egmont, 2013. "Understanding Profit and the Markets: The Canonical Model," MPRA Paper 48691, University Library of Munich, Germany.

    More about this item

    Keywords

    financial crisis; intellectual crisis; power of ideas; material consistency; logical consistency; determinism; deductive method; failure of reason; common sense; domain of economics; Cournot’s Unfitness Proposition;

    JEL classification:

    • B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology

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