The paper starts by distinguishing between two kinds of economic practice: theoretical economic practice (TEP) (model and theory building) and direct economic practice (DEP) (the practical operation upon real economies). Most of the epistemological and philosophical considerations have been directed to the first type of practice, one of whose main goals is the discovery of particular sorts of economic laws, mechanisms and other regularities which throw light on relevant economic patterns. We do not deny that in some restricted domains these (...) kinds of regularities may be found. Rather, we claim that the realm of economics is best understood as consisting of processes whose regular structure (if they have one at all) is not guaranteed beforehand but may be crucially influenced and successfully enforced by what we call DEP. We claim that (a) some economic processes are a particular type of social process that will be referred to as Expectations-Based Processes (EBP). Characteristically, an EBP shows a connection between the information that individuals receive from the relevant economic context, the expectations they form, and the actions they perform; (b) in those cases in which EBP exhibit a regular behaviour, they depend on agents' expectations and, crucially, we argue, on interventions upon them. Authorities as well as other economic actors may intervene to change agents' expectations (and therefore, their decisions), contributing to shape EBP and helping to produce the patterns that lead to some targeted economic phenomena. These features of EBP show that they are not shielded from external influences and they do not run autonomously once triggered. Therefore they cannot be conceived as mechanisms or as economic machines. Rather they are open-ended processes that require continuous prodding on the part of policy makers to keep them running in the intended way. (shrink)

El trabajo identifica dos problemas metodológicos que dificultan la contrastación de teorías económicas: 1) en su empleo habitual, no es posible decidir si se satisfacen sus condiciones de aplicación, antes e independientemente de la aplicación de las mismas; 2) si es admisible modificar las condiciones de aplicación de una teoría, debe aceptarse que también pueda ser "manipulada" su clase de predicciones consideradas relevantes. Ambas tesis conforman la base de la argumentación de Milton Friedman contra el realismo de los supuestos, pero (...) no han sido debatidos explícitamente y, consecuentemente, sus argumentos no han recibido una respuesta adecuada de parte de sus críticos. Two methodological problems obstruct the tests of economic theories: 1) usually it is not possible to ascertain whether the domain assumptions are satisfied before of the applications of the theory; 2) if it is admissible to modify the domain assumptions of a theory, it must also be accepted that the class of its supposedly relevant predictions can be modified. Both thesis are the foundations of Friedman's argumentation against the realism of the economic assumptions, but they have not been debated explicitly and therefore, his arguments haven't received an adequate response. (shrink)

The disagreement about intertemporal coordination between Austrians and Keynesians is explained pointing out to differences both in the way expectations and motivations are treated and the methodological principles assumed by each view. Austrians believe that research should proceed showing first what guarantees a successful coordination in individualsŠ plans, and only latter showing which could hinder the “natural” course. Keynes, on the contrary, do not start with any ideal state of affairs, but allows economies to work either “good” or “bad” according (...) to the prevailing expectations among entrepreneurs. In this way uncertainty and expectations are fully incorporated into economic theory. A link between Austrian approach and popperian situational analysis is suggested. (shrink)

In his situational logic, Popper offers a model for social sciences which specifies how a social explanation of human actions can be scientific and objective. He also describes the specific kind of phenomena the social sciences can explain and predict. To perform this task, the model includes a desc..

In social sciences, particularly in economics, ceteris paribus clauses give rise to special methodological problems, which make difficult both to regard its generalizations as genuine laws and to test such laws empirically. Daniel Hausman claims that the problem with ceteris paribus clauses in economics is that their content is not fully specified. This paper aims to discuss and cri-ticize Hausman’s reconstruction of an economic law and his ideas as to how they could be tested. Particularly, it will be argued that (...) (a) Hausman does not explain how empirical evidence could be used to evaluate economic generalizations qualified by vaguely specified ceteris paribus clauses; (b) his explanation of the fundamental economic laws is careful and persuasive, but it makes impossible to test them empirically, both in experimental and ordinary economic settings; (c) although Hausman is not concerned with derived economic laws, according to his viewpoint they could, in principle, be tested; unfortunately, however, the tendency to include subjective factors among the clauses’ explicit components makes them also practically non-testable. Finally (d) it will be argued that the real problem with ceteris pari-bus clauses in economics is to be found in their failure to be well articulated by a social and economic theory. (shrink)