Economic Methodology in a Nutshell

Abstract

This essay is a tendentious survey of standard methodological literature, focusing on the empirical appraisal of theory, microeconomic theory in particular. I shall in particular discuss four approaches to praising or damning microeconomic theory that have dominated methodological discussions. They might be called the deductivist, the positivist or Popperian, the predictionist, and the eclectic. Or to assign representative or striking figures to positions, these are John Stuart Mill's, Mark Blaug's, Milton Friedman's, and Donald McCloskey's views. I shall sketch and assess each position and defend aspects of the deductivist and eclectic views. Along the way I shall have something to say not only about how to do economics, but also about how to philosophize about economic methodology.