Philosophy of Economics

Abstract

Although there are no doubts regarding the impact of economics in society and politics, doubts regarding its epistemological status endure. Does economics provide us with bona fide empirical theories? Are its mathematical models on a par with those of the hard sciences, or is its scientific character exaggerated? This chapter focuses on the key problem of the philosophy of economics: the reconciliation of its claim to empirical significance with what often appears as a non-empirical methodology, favoring deduction from a priori principles and showing little sensitivity to refutation by observation and experiment. Several attempts at answering this problem are considered, both in the Millian tradition and following neo-positivist approaches. Finally, the empirical status of the discipline is put in perspective with its recent extension to new fields of inquiry, such as behavioral economics and neuroeconomics, where experiments seem to be part of the core methodology.