Seyed Mohammad Reza Amiri Tehrani; Mahdi Mahdian
Abstract
AbstractThis 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 ...
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AbstractThis 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.
