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Saturday, January 28, 2017
I believe the goal of economics is to make accurate representations of economic phenomena. I regard this is the purpose of any branch of knowledge. Scientists and intellectuals attempt to make accurate statements about their object of study.
Economic statements can be about specific real world situations or they can be about universal phenomena. It's also important for statements to be somewhat explicit, otherwise it can be hard to understand what is actually being declared. Economic statements can be written with mathematics or with common language.
I regard the evaluation of economic statements as a two step process:
1. Make an economic statement
2. Analyze evidence to determine the validity of the economic statement
In my opinion the second step is the most important part of economics. Building a DSGE model is cool, but it's only a statement. I believe it's more important to find evidence that supports or disputes an economic statement in order to determine its accuracy. That's why I support econometrics and the empirical revolution in economics. I'm inspired by innovative methods that can help people determine the validity of economic statements.
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