by The limited value of economic theory Submission to observed or experimental data is the golden rule which dominates any scientific discipline. Any theory whatever, if it is not verified by empirical evidence, has no scientific value and should be rejected. Maurice Allais Formalistic deductive ‘Glasperlenspiel’ can be very impressive and seductive. But in the realm of science, it ought to be considered of little or no value to simply make claims about a model and lose sight of reality. In mainstream economics, empirical evidence still only plays a minor role and models largely function as a substitute for empirical evidence. To have valid evidence is not enough. What economics needs is sound evidence. The premises of a valid argument do not have to be
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The limited value of economic theory
Submission to observed or experimental data is the golden rule which dominates any scientific discipline. Any theory whatever, if it is not verified by empirical evidence, has no scientific value and should be rejected.
Formalistic deductive ‘Glasperlenspiel’ can be very impressive and seductive. But in the realm of science, it ought to be considered of little or no value to simply make claims about a model and lose sight of reality.
In mainstream economics, empirical evidence still only plays a minor role and models largely function as a substitute for empirical evidence.
To have valid evidence is not enough. What economics needs is sound evidence. The premises of a valid argument do not have to be true, but a sound argument, on the other hand, is not only valid but builds on premises that are true. Aiming only for validity, without soundness, is setting the economics aspiration level too low for developing a realist and relevant science.