Abstract

When analyzed within economic methodology, the Duhem-Quine thesis has been given a particularly restrictive interpretation, with the focus on the testing of individual hypotheses. The most recent contributions however have shifted the focus from the testing of individual hypotheses to that of more extensive structure such as paradigms or schools of thought within economics. In this connection the impact of the Duhem-Quine thesis remains extremely pessimistic in prohibiting the rejection of an economic paradigm. In this paper we refute the basis for this methodological pessimism by focusing on an alternative and broader framework of analysis, which is termed "causal holism." Contrary to the standard approaches to economic methodology, causal holism does not start with the Duhem-Quine thesis at the level of testing. Rather we distinguish between the Duhem-Quine thesis at the level of meaning and at the level of testing. This distinction necessitates a reinterpretation of the role of economic theory. At the level of testing, contrary to the standard interpretation, which distinguishes between a strong and a weak thesis, we introduce a threefold distinction. Applying this distinction to economic methodology, we demonstrate how economic theory can be exposed to holistic testing while incorporating the causal holistic reinterpretation of the Duhem-Quine thesis.