Chapter

On Methods and Morals

James Halteman and Edd Noell

in Reckoning with Markets

Published in print February 2012 | ISBN: 9780199763702
Published online May 2012 | e-ISBN: 9780199932252 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199763702.003.0007
On Methods and Morals

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Is economics like car building or car repair? Are we working toward a finished product, or are we attempting to answer pertinent questions that arise and change from time to time? These questions are entertained in this chapter in order to explore the nature of the methods economists employ. The subjective nature of data and the relevance of predicting from past trendsis explored. The proof that rational choice analysis predicts better than any alternative process is seen to be less than definitive by typical standards of proof. Welfare economics comes closest to philosophy when it optimizes social welfare with a social welfare function, but the ramifications of that model are rarely explored. Finally, it is suggested that key questions change and economic thinking then adapts to deal with the new challenges. The vignette for this chapter looks at John Maynard Keynes and his rethinking of mainstream macroeconomics.

Keywords: economic methodology; rational choice; pareto optimality; homo economicus; fact-value distinction; social welfare function

Chapter.  5592 words. 

Subjects: Financial Markets

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