Why economics should be a modest and reasonable science

Luiz Carlos Bresser-Pereira

Journal of Economic Issues, volume XLVI (2): 291-301. Paper presented to the annual meeting of the Association for Evolutionary Economics (AFEE), receiving the James Street Scholar for 2012, and participating from the panel "Institutionalism and the Great Crisis", Chicago, January 7, 2012.

Unlike the methodological sciences such as mathematics and decision theory, which use the hypothetical-­‐deductive method and may be fully expressed in complex mathematical models because their only truth criterion is logical consistency, the substantive sciences have as their truth criterion the correspondence to reality, adopt an empirical-­‐deductive method, and are supposed to generalize from and often unreliable regularities and tendencies. Given this assumption, it is very difficult for economists to predict economic behavior, particularly major financial crises.

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