Post on 18-Jan-2018
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Chapter 1: Introduction
Questions for Review and Discussion (pp.13)
1, 2, 4, 9
Primary Aim of Text Chart the development of
economic thought over time
Demonstrate how past mainstream thought has contributed to the scope and content of modern economics
Components of Economic Thought Vision – broad perception
of an economic system Theory – formal models
that capture the vision of economic systems
Historical Mechanism to deal with Scarcity1. Brute force2. Tradition3. Institutional authority4. Markets
Focus of Microeconomics Focus on stability and
growth of aggregate measures of an economic system
Sociology of Economic Knowledge1. Relativist school
Most influential prior to 1950’s
Considers the historical, economic, social and political forces that shape the content of emerging theories
2. Absolutist (Whig) School Progress of theory
depends on the discovery and explanation of unsolved problems or paradoxes by professional economists reacting to intellectual developments within the profession
Heterodox Approaches Read pp. 5 to 10 on your
own
Positive Economics What is Focus on impersonal
forces that govern economic activity
David Ricardo
Normative Economics What should be Integrates economic
theory with ethics Welfare economics
Art of Economics Concerned with public
policies Marshall
Methods of Empirical Reasoning Induction – Proceeds from
statistical information of people, places,
and ‘events’ (or activities) to
general concepts Deduction – Applies clear
and distinct theories to practical “events”
Abductive – Mix of two approaches-- Combines
history,institutions and empirical study to gain insights into complex systems where definitive theories are beyond ones grasp
-- Heuristics
Appendix: Evolution of Methodological Thought (pp. 17-21)
Logical Positivism Provided a scientific
method with philosophical foundations
Originated with the Vienna Circle
Scientists develop a deductive structure (a logical theory) that leads to empirically testable propositions
Dominant philosophy in the 1920’s and 1930’s
The purpose of science is to establish a “truth”
Popper’s Falsification Empirical tests do not
establish the truth of a theory, only its falsity
An experiment that yields the predicted result indicates that the theory is not false
Scientific Paradigms Thomas Kuhn A given approach and
body of knowledge is built into a researchers analysis
“Normal Science” seeks to solve puzzles and paradoxes posed by the framework of the dominant paradigm
Change occurs by revolution
Research Programs Imre Lakatos Existing theory may not
embody the “truth”There are
competing research programs, each involve:
1. Analyzing and attempting to falsify a set of data
2. Unquestioned acceptance of a set of hard-core logical postulates
Rhetorical Approach to Methodology Emphasizes the
persuasiveness of language
Sociological Approach to Methodology Focus on social and
institutional constraints influencing the acceptability of a theory
Method of Abduction An eclectic approach Researchers never know
with certainty whether theory is true or false
They accept the most promising ideas as tentatively true working hypotheses