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I think the catch with macroeconomics is that anybody can come by after the fact and provide an explanation for why things happened the way they did. Many of th
by zacharypinter 18y ago
I think the catch with macroeconomics is that anybody can come by after the fact and provide an explanation for why things happened the way they did. Many of the explanations are not falsifiable, and two competing explanations might both sound reasonable. So, a person chooses the explanation they prefer for some reason other than economics. If they distrust government, they prefer the explanation that says it was government's fault. If they hold contempt for the rich, they prefer the explanation of corporate greed. And so on...
One of the key tenants of science is that a hypothesis makes testable predictions. If we can't falsify economic explanations, then perhaps we should take this approach and focus on the theories that make the best predictions.