Foundations of Economic Method: A Popperian Perspective

Foundations of Economic Method: A Popperian Perspective

Foundations of Economic Method: A Popperian Perspective

Foundations of Economic Method: A Popperian Perspective

Synopsis

Many consider "Foundations of Economic Method to be Lawrence Boland's best work. This updated edition is radically changed from the original positioning methodology vis-a-vis the current practice of economists and is all the better for it.

Excerpt

Anyone familiar with the first edition of this book will immediately notice that this edition is at least seventy percent larger. There are two key reasons for this. The most obvious is that the field of economic methodology has grown by leaps and bounds over the last two decades. But the more important reason is that, unlike other methodology books about economics, both versions of this one are devoted to what has become known as 'small-m' methodology. Small-m methodology is applied methodology. Small-m methodology is distinguished from big-M Methodology because the latter is more concerned with just the timeless questions that have bothered philosophers of science for decades or centuries. Small-m methodology is about issues that affect the decisions economic model builders make everyday. And those decisions differ year-by-year, decade-by-decade. Consequently, the various applied topics of concern in this edition will be those found in today's economic literature.

As with the first edition, I have endeavored to apply some core methodological considerations to a set of model-building decisions that face mainstream, neoclassical economists. In the first edition, the primary issues addressed were those facing neoclassical model builders in the early 1980s such as the limitations of the then popular Rational Expectations Hypothesis, the urgency of dealing with the problems of disequilibrium analysis, the questions posed by the alleged need for microfoundations of macroeconomics and the on-going concern for the problems created by the extent to which neoclassical economics seems incapable of dealing with the element of time in a satisfactory manner.

In this edition, the field of application is very different - partly because the methodological questions currently facing model builders are different and partly because I have expanded the field of application to include some generic methodological problems that I failed to address in the first edition. Specifically, the new questions are those raised by the consideration particularly of New Institutional Economics, game theory and evolutionary economics. Thus, to expand the field, I will also address methodological problems such as those presented by so-called 'bounded rationality', ideal-type methodology, Bayesian decision theory and the economics of information - some of these directly involve issues of learning methodology and epistemology.

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