Will the Financial Crisis Become a Milestone in the Development of Methodology of Economics?

It has been widely accepted that philosophers of science wrote a “swansong” for positivism during the second half of the 20th century. Milton Friedman and Paul Samuelson, major contributors in the fi eld of economic methodology at the time, the argument goes, never refl ected the demise. Therefore, positivist roots are still to be found in infl uential theoretical concepts developed by mainstream economists. Specifi cally, I present the hypothesis of rational expectations and the theory of effi cient markets as two signifi cant outcomes of a “high tide” of positivist thinking in economics. However, quite a large number of scholars currently share the view that the two concepts contributed in a non-negligible manner to the development leading to the fi nancial crisis culminating in 2008 and 2009 and should be replaced by behavioural or other approaches. The article thus asks, in quite a novel way, if the crisis – seen by many as an empirical rejection of both the concepts – can also be seen as a milestone in the development of methodology of economics.