Fallibility in formal macroeconomics and finance theory
This note focuses on George Soros's challenge to macroeconomics and finance theory that any valid methodology of social science must explicitly recognize fallibility in a Knightian sense. We use a simple algebraic example to sketch how extant models formalize fallibility. We argue that contemporary theory's epistemological and empirical difficulties can be traced to assuming away fallibility in a Knightian sense. We also discuss how imperfect knowledge economics provides a way to open mathematical models to such fallibility, while preserving economics as an empirical science.
Year of publication: |
2013
|
---|---|
Authors: | Frydman, Roman ; Goldberg, Michael D. |
Published in: |
Journal of Economic Methodology. - Taylor & Francis Journals, ISSN 1350-178X. - Vol. 20.2013, 4, p. 386-396
|
Publisher: |
Taylor & Francis Journals |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Knowledge, Information, and Expectations in Modern Macroeconomics : In Honor of Edmund S. Phelps
Acemoglu, Daron, (2022)
-
Frydman, Roman, (2001)
-
Change and expectations in macroeconomic models: recognizing the limits to knowability
Frydman, Roman, (2013)
- More ...