Four detours

D. P. O'Brien

Journal of Economic Methodology, 1998, vol. 5, issue 1, 23-41

Abstract: This paper considers four examples of apparent progress in economics, each of which proved illusory. In each case the problem stemmed from factual errors. The cases relate to the treatment by Arrow of the incentives to finance basic research, the obliteration of industrial economics by game theory, Pigou's treatment of the legal background to his exposition of market failure involving externalities, and the macroeconomic disputes leading to Robbin's The Great Depression of 1934. These cases support the view that economists do need the discipline of a well-attested factual basis for their structures. Stylised facts are not merely inadequate; they are almost always not facts at all.

Keywords: methodology; assumptions; empirical basis; stylised facts; Arrow; Pigou; Hayek; Robbins; game theory; competition policy (search for similar items in EconPapers)
Date: 1998
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DOI: 10.1080/13501789800000002

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