Mainstream Aversion to Economic Methodology and the Scientific Ideal of Physics

There is a persistent aversion towards methodological discourse by most mainstream economists. Frank Hahn (1992) exemplified this attitude and provoked a number of reactions concerning the role and the reasons for methodological aversion. After offering a categorization of the main explanations for methodological aversion, the paper suggests an explanation that is based on the role of the physics scientific ideal. It argues that the strive to achieve the high scientific status of physics by following the methods of physics, contributed to the negative mainstream attitude towards economic methodology. This can be reinforced by examining the writings of extremely influential mainstream economists such as Irwin Fisher and Milton Friedman. These works clearly imply that the hard science status of economics renders methodological discussions and especially methodological criticism, rather pointless. Given that the existing prescriptions for making economic methodology more attractive do not give much thought to this important aspect of mainstream economics, the paper also argues for a more systematic discussion of this issue

Mainstream Aversion to Economic Methodology and the Scientific Ideal of Physics

There is a persistent aversion towards methodological discourse by most mainstream economists. Frank Hahn (1992) exemplified this attitude and provoked a number of reactions concerning the role and the reasons for methodological aversion. After offering a categorization of the main explanations for methodological aversion, the paper suggests an explanation that is based on the role of the physics scientific ideal. It argues that the strive to achieve the high scientific status of physics by following the methods of physics, contributed to the negative mainstream attitude towards economic methodology. This can be reinforced by examining the writings of extremely influential mainstream economists such as Irwin Fisher and Milton Friedman. These works clearly imply that the hard science status of economics renders methodological discussions and especially methodological criticism, rather pointless. Given that the existing prescriptions for making economic methodology more attractive do not give much thought to this important aspect of mainstream economics, the paper also argues for a more systematic discussion of this issue

Mainstream Aversion to Economic Methodology and the Scientific Ideal of Physics

There is a persistent aversion towards methodological discourse by most mainstream economists. Frank Hahn (1992) exemplified this attitude and provoked a number of reactions concerning the role and the reasons for methodological aversion. After offering a categorization of the main explanations for methodological aversion, the paper suggests an explanation that is based on the role of the physics scientific ideal. It argues that the strive to achieve the high scientific status of physics by following the methods of physics, contributed to the negative mainstream attitude towards economic methodology. This can be reinforced by examining the writings of extremely influential mainstream economists such as Irwin Fisher and Milton Friedman. These works clearly imply that the hard science status of economics renders methodological discussions and especially methodological criticism, rather pointless. Given that the existing prescriptions for making economic methodology more attractive do not give much thought to this important aspect of mainstream economics, the paper also argues for a more systematic discussion of this issue

The Initial Controversy - Introduction

During the middle third of the twentieth century, the ideas of John Maynard Keynes and those who described themselves as “Keynesians” acquired a profound influence over both the economics profession and the macroeconomic policy process. After the publication of Milton Friedman’s (1956) Studies in the Quantity Theory of Money, Keynesians were obliged to compete with “monetarists” for policy and intellectual influence. These two volumes examine aspects of this counter-revolution by focusing on Friedman’s claim that he was merely formalising the macroeconomic ideas of the first generation Chicago School, at whose “feet” he “sat” in 1932-3 and 1934-5 (Friedman chapter 7 [1972/1974], 163). ISBN: 185196767

From Keynes to Friedman via Mints: Resolving the Dispute over the Quantity Theory Oral Tradition

The Keynes Before Keynes Milton Friedman (chapter 2 [1956], 3-4) asserted that “Chicago was one of the few academic centres at which the quantity theory continued to be a central and vigorous part of the oral tradition throughout the 1930’s and 1940’s”. Friedman sought to “nurture” the revival of the quantity theory by linking it to this Chicago “oral tradition”. According to Friedman the “flavor” of this oral tradition was captured in a model in which the quantity theory was “in the first instance a theory of the demand for money”. Friedman added that to “the best of my knowledge no systematic statement of this theory as developed at Chicago exists, though much of it can be read between the lines of [Henry] Simons’ and [Lloyd] Mints’s writings”. He also enlisted the names of Frank Knight and Jacob Viner in support of his assertion. ISBN: 185196767

New multicategory boosting algorithms based on multicategory Fisher-consistent losses

Fisher-consistent loss functions play a fundamental role in the construction of successful binary margin-based classifiers. In this paper we establish the Fisher-consistency condition for multicategory classification problems. Our approach uses the margin vector concept which can be regarded as a multicategory generalization of the binary margin. We characterize a wide class of smooth convex loss functions that are Fisher-consistent for multicategory classification. We then consider using the margin-vector-based loss functions to derive multicategory boosting algorithms. In particular, we derive two new multicategory boosting algorithms by using the exponential and logistic regression losses.Comment: Published in at http://dx.doi.org/10.1214/08-AOAS198 the Annals of Applied Statistics (http://www.imstat.org/aoas/) by the Institute of Mathematical Statistics (http://www.imstat.org

Henry Simons and the Other Minsky Moment

This paper examines the influence of Henry Simons on Hyman Minsky. Simons' proposals for banking reform are contrasted with Minsky's alternative 'big bank' and 'big government' programme for stabilising the economy. The paper concludes by arguing that Simons' proposals for stabilising banking would have prevented a credit bubble, but would not avoid economic instability. Nevertheless, Minsky remained an admirer of Simons’ ‘banking’ approach to the study of capitalism

How Unique Was The Chicago Tradition? - Introduction

The first part of this chapter describes and elaborates upon the contributions made to this expanding literature by Tom Cate, J. Ronnie Davis, David Laidler, Joseph Aschheim and George Tavlas regarding the claim that inter-war Chicago exhibited unique quantity theory characteristics. The second part examines the so-called “‘Chicago Plan’ of Banking Reform”, described by Albert Hart (1935), a Chicago graduate student of the 1930s. The Chicago Plan was a response to the Great Depression which required all banks to hold 100% reserves against their deposits, thus eliminating the instability caused by fractional reserves. ISBN: 185196767