The two methods of economics
Luiz Carlos Bresser-Pereira
Texto para Discussão 148, maio 2006.
Economic theory employs two methods: the hypothetical-deductive method, used principally by neoclassical economists, and the historical-deductive method adopted by classical and Keynesian economists. Both are legitimate, but, since economics is a substantive, not a methodological, science, whose object is the economic system, the historical-deductive method is the more appropriate. The hypothetical-deductive method enables the economist to develop tools to analyze the economic system, but fails in analyzing the economic system as a whole. In contrast, the historical-deductive method proceeds from the empirical observation of reality and the search for regularities and tendencies. It is an empirical method, appropriate for the substantive sciences dealing with open systems, as it is the case of economics.