Pulled back from comments
For some reason which I can't understand Adam Ozimek courteously comments on my rude post insulting Ryan Avent and economics (not in that order).
As always, I take your point of view seriously. But I disagree with you here. I think a simplified but reasonable approximation of a "real" science paper is that it has 3 parts: lit review, theory + hypothesis, and empirical test. I take the role of theorists to be specializing in one part, a crucial part, of the scientific method, while not necessarily producing work that in and of itself constitutes science. The same could be said of lit reviews. In short: if you break up the scientific method and intensely specialize, then parts begin to look like not science, but they are.
Is that reasonable?
Also, for an economic hypothesis that has been abandoned because they did not fit the data, how about one of the most famous: the Phillips curve? (At Modeled Behavior I also pointed to 80s RBC models with no money, but Krugman claims people are still doing that, so I'll leave that aside for now).
And as time goes on it becomes increasingly difficult to view economics as a coherent field, but I don't think we're there yet. Most economists come from a grad program that covers a reasonably similar core. What % of programs use Varian, Mas-Collel Whinston and Green, or something similar for the micro core?
I agree certain subfields are largely engaged in un-scientific, but often worthwhile endeavors. Normative pursuits obviously fit here. But I think when critics say econ isn't a science, they're talking about when it's trying to be a science, e.g. when it's making positive statements. So before saying "parts of econ are unscientific", I think it's important to emphasize that the parts that try to be generally are, and some parts that appear not to be (e.g. theory) are part of the scientific process.
# posted by Adam Ozimek : 2:34 PM
Ah, I see you have replied to the Phillips curve in your post below!
# posted by Adam Ozimek : 2:52 PM
Dear Adam Ozimek
Thanks for coming by. I also admire your polite tone (especially given the very rude tone of my post).
Relatively briefly look at the argument that economics as a whole is scientific and that it is one thing with a common core. Yes it has a core "What % of programs use Varian, Mas-Collel Whinston and Green, or something similar for the micro core?" Yes some economists are scientists. However, there is no link between the scientists and the core. Below I ask how Varian has revised Microeconomic Analysis since the first edition in the light of new data. I don't know the answer. Those books are certainly part of the core of modern economics. They do not discuss much the confrontation of testable implications of the theory and data. I am quite sure that they don't point to any empirical successes in which the theory was used to make surprising but correct predictions. Yet it is, indeed, a key part of the core of modern economics.
An aside. Economists always talk about physicists. Why indeed there are many physics textbooks now in use which present theories which have been refuted by the data. People are taught Newtonian Mechanics before they are taught about relativity. People are taught classical physics before quantum mechanics and non-relativistic quantum mechanics before semi-modern quantum mechanics etc. But these are steps in a teaching program. Before becoming a physicist graduate students are explosed to unfalsified models *and* the fact that existing theory is fundamentally not there yet is stressed. Economics graduate students have neither experience.
OK now my long reply to the comment.
I agree that theorists have a role in scientific enterprises. Obvously the classic example is theoretical physicists who do math all day, never conduct and experiment and play a vital necessary role in a very successful scientific enterprise (an aside -- I think one of the worst problems with economists is that the only natural science most of us consider is physics).
But the interaction of theoretical physicists and data is completely different from the interaction of economists and data. In physics, elegant models which contradict the data are abandoned. Many (perhaps most) theoretical physicists look down on experimental physicists (who they rank above non physicists who they rank above sheep). They clearly resent the fact that their brilliant model development is not appreciated, because it happens to not correspond to this universe. But the field moves on.
This just doesn't happen in economics. The theory basically stays the same no matter what the data say. Consider your example -- economists are taught from Varian or Mas Colell Whinston. The first edidtion of Varian's microeconomic analysis was published long ago (I studied from it). How have the data caused later editions to differ from the first ? (I ask for information I have only opened two editions of the book).
The key point is that economists identify the set of theory with the set of models and note that models are false by definition. Testable implications are developed, tested and rejected and nothing happens. The model with false implications is still used. It's status isn't diminished, because economic theory was never a set of scientific hypotheses.
Consider Lakatos's idea of a degenerative research program. Oddly I can't find a good link. The general view is that all research programs have cores and auxiliary hypotheses and rejection of a testable implication generally leads to abandoning an auxiliary hypothesis. The distinguishing feature of a degenerative research program is that, once the core belief is reconciled with the data that rejected the joint core and auxiliary hyotheses, the matter is settled and nothing else changes.
Each confrontation with the data is local and once the core belief is reconciled with that bit of data, no implications for other phenomena are developed. The new auxiliary hypothesis has served only to protect the core belief from the data.
I read something like this somewhere. I thought it was a perfect description of econmics after the death of Lakatos. He was thinking of Ptolomaic astronomy and epicycles, but that is *exactly* what we do.
So when testing the life cycle- PIH we note that the hypothesis does not implay a representative consumer nor utility functions which are separable in consumption and everything else nor time separable utility functions. But when we put consumption into a macro model, we almost always put in a utility function wich is log(c_t) plus other things. That part of the model is rejected, but so what. The auxiliary assumptions are only a problem when the PIH is confronted with data on consumption and not when it is used to develope models which are used to advise poicy makers.
What could possibly be more degenerative than that ?