Sunday, 7 August 2016

Relative usefulness of economics

In the abstract to a paper Methodological institutionalism as a transformation of structural econometrics the author, Marcel Boumans, writes,
Economics is an inexact science, incapable of providing a complete set of causal factors to explain any economic phenomenon.
But a basic point is missed here. To be useful economics doesn't have to provide the complete set of causal factors, it just has to provide a greater set than the next best alternative. It may well be that no field of study can provide the complete set of factors. Its a relative standard that matters, not an absolute one, for the usefulness of economics.

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