An Analysis of Friedman's methodological specifications

Document Type : Research Paper

Authors

1 Assistant Professor, Institute for Humanities and Cultural Studies

2 Expert in Charge of the Derivatives Settlement Tehran, Iran

10.30465/ps.2020.5234

Abstract

Abstract
This article is about Milton Friedman's methodology in Economics. Friedman's main article "The ‎Methodology of Positive Economics" published in ‎‏1953‏‎ is a mixture of philosophical ideas. By ‎analyzing this article and critics of his methodology among economics philosophers as well, we ‎recognize six specification for his methodology. The first is Friedman' theory which is a complex ‎intermixture of two elements; language and substantive hypothesis. The second is Friedman' ‎experiment, which is in fact an indirect testing of a theoretical prediction by experimental ‎evidences. So the validity of a theory depends on its power or prediction, not the truth of its ‎assumptions. The third is Friedman's unrealisticness that allows substantial hypotheses to capture ‎useful aspects of reality not the whole. The forth is the Marshallian approach of Friedman in ‎Economics versus the Walrasian, which lets him to build the economic model problem specific. The ‎fifth is Friedman's statistical approach. He believes that the only way that economists can come up ‎with a consensus is to use statistics and probabilities. The sixth is Friedman's causality. He believes ‎that the concepts of cause and effect are ambiguous, instead, we should use endogenous and ‎exogenous concepts in economic models. ‎

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