Methodological Pluralism in Economics: The ‘Why’ and ‘How’ of Causal Inferences
Abstract
Recently, two distinct notions of pluralism have been put forward in regard to research methods in economics: (1) model pluralism, stating that economists construct many theoretical models offering descriptions of actual or possible mechanisms and use different models for different purposes, and (2) evidential pluralism, according to which causal claims are established on the basis of theoretical conjecture and by observing the operation of a difference-making factor. In this paper, I make a case for methodological pluralism. I argue that economists not only use different research methods but also interpret their role in causal inference differently — depending on which (big-M) Methodological school they subscribe to. The argument proceeds by analyzing examples of recent economic research appealing to different Methodological commitments.
References
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Claveau F. (2012), “The Russo—Williamson Theses in the Social Sciences: Causal Inference Drawing on Two Types of Evidence,” Studies in History and Philosophy of Science Part C: Studies in History and Philosophy of Biological and Biomedical Sciences, 43(4), 806-813. https://doi.org/10.1016/j.shpsc.2012.05.004
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Jacob B. A., Ludwig J. (2012), “The Effects of Housing Assistance on Labor Supply: Evidence from a Voucher Lottery,” American Economic Review 102(1), 272-304. https://doi.org/10.3386/w14570
James W. (1907), “Pragmatism’s Conception of Truth,” The Journal of Philosophy, Psychology, and Scientific Methods 4(6), 141-155. https://doi.org/10.2307/2012189
Jovanovic B., Szentes B. (2013), “On the Market for Venture Capital,” Journal of Political Economy 121(3), 493-527. https://doi.org/10.1086/670359
Mäki U. (1992), “On the Method of Isolation in Economics,” Poznań Studies in the Philosophy of the Sciences and the Humanities 26, 19-54.
Mäki U. (1994), “Isolation, Idealization, and Truth in Economics,” Poznań Studies in the Philosophy of the Sciences and the Humanities 38, 147-168.
Mäki U. (2009), “MISSing the World: Models as Isolations and Credible Surrogate Systems,” Erkenntnis 70(1), 29-43. https://doi.org/10.1007/s10670-008-9135-9
Mäki U. (2017), “Modelling Failure” [in:] Logic, Methodology, and Philosophy of Science: Proceedings of the 15th International Congress (Helsinki), H. Leitgeb, I. Niiniluoto, P. Seppälä, London: College Publications, 381-400.
Mäki U. (2018), “Rights and Wrongs of Economic Modelling: Refining Rodrik,” Journal of Economic Methodology 25(3), 218-236. https://doi.org/10.1080/1350178X.2018.1488475
Marchionni C. (2017), “Mechanisms in Economics” [in:] The Routledge Handbook of Mechanisms and Mechanical Philosophy, S. Glennan, I. Phyllis (eds.), London: Routledge, 423-434.
Mariyani-Squire E. (2017), “Critical Reflections on a Realist Interpretation of Friedman’s ‘Methodology of Positive Economics’,” Journal of Economic Methodology 24(1), 69-89. https://doi.org/10.1080/1350178X.2017.1279743
Maziarz M. (2018a), “Causal Inferences in the Contemporary Economics,” Mendeley Data. http://dx.doi.org/10.17632/v7dhjnd8xg.2
Maziarz M. (2018b), Disentangling the Philosophy of Economics, Warsaw: The Publishing House of the Institute for Market, Consumption, and Business Cycles Research — National Research Institute.
McCloskey D. N. (1998), The Rhetoric of Economics, Madison: University of Wisconsin Press.
Moneta A., Russo F. (2014), “Causal Models and Evidential Pluralism in Econometrics,” Journal of Economic Methodology 21(1), 54-76. https://doi.org/10.1080/1350178X.2014.886473
OECD (1994), Jobs Study: Evidence and Explanations, Paris: OECD Publishing.
Reiss J. (2007), “Do We Need Mechanisms in the Social Sciences?,” Philosophy of the Social Sciences 37(2), 163-184. https://doi.org/10.1177/0048393107299686
Reiss J. (2013), Philosophy of Economics: A Contemporary Introduction, London: Routledge.
Rodrik D. (2015), Economics Rules: The Rights and Wrongs of the Dismal Science, London: WW Norton & Company.
Russo F., Williamson J. (2007), “Interpreting Causality in the Health Sciences,” International Studies in the Philosophy of Science 21(2), 157-170. https://doi.org/10.1080/02698590701498084
Sacerdote B. (2007), “How Large Are the Effects from Changes in Family Environment? A Study of Korean American Adoptees,” The Quarterly Journal of Economics 122(1), 119-157.
Wible J. R. (1984), “The Instrumentalisms of Dewey and Friedman,” Journal of Economic Issues 18(4), 1049-1070.
Ylikoski P., Aydinonat N. E. (2014), “Understanding with Theoretical Models,” Journal of Economic Methodology 21(1), 19-36.
Zhou J. (2014), “Multiproduct Search and the Joint Search Effect,” American Economic Review 104(9), 2918-2939. https://doi.org/10.1257/aer.104.9.2918
Andersen S., Ertaç S., Gneezy U., Hoffman M., List J. A. (2011), “Stakes Matter in Ultimatum Games,” American Economic Review 101(7), 3427-3439. https://doi.org/10.1257/aer.101.7.3427
Aydinonat N. E. (2018), “The Diversity of Models as a Means to Better Explanations in Economics,” Journal of Economic Methodology 25(3), 237-251. https://doi.org/10.1080/1350178X.2018.1488478
Bansal R., Coleman W. J. (1996), “A Monetary Explanation of the Equity Premium, Term Premium, and Risk-Free Rate Puzzles,” Journal of Political Economy 104(6), 1135-1171. https://doi.org/10.1086/262056
Backhouse R. E. (2002), “Economic Models and Reality: The Role of Informal Scientific Methods” [in:] Fact and Fiction in Economics: Models, Realism, and Social Construction, U. Mäki (ed.), Cambridge: Cambridge University Press, 202-213.
Bartling B., Fehr E., Schmidt K. M. (2012), “Screening, Competition, and Job Design: Economic Origins of Good Jobs,” American Economic Review, 102(2), 834-864. https://doi.org/10.1257/aer.102.2.834
Beaudry P., Doms M., Lewis E. (2010), “Should the Personal Computer Be Considered a Technological Revolution? Evidence from US Metropolitan Areas,” Journal of Political Economy 118(5), 988-1036. https://doi.org/10.1086/658371
Blaug M. (1992), The Methodology of Economics: Or, How Economists Explain, Cambridge: Cambridge University Press.
Boland L. A. (1979), “A Critique of Friedman’s Critics,” Journal of Economic Literature 17(2), 503-522.
Boland L. A. (2014), Methodology for a New Microeconomics: The Critical Foundations, London: Routledge. https://doi.org/10.4324/9781315773261
Burgess R., Pande R. (2005), “Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment,” American Economic Review 95(3), 780-795.
Carnap R. (1959), “The Elimination of Metaphysics through Logical Analysis of Language” [in:] Logical Positivism, A. Ayer (ed.), New York: The Free Press, 60-81.
Claveau F. (2012), “The Russo—Williamson Theses in the Social Sciences: Causal Inference Drawing on Two Types of Evidence,” Studies in History and Philosophy of Science Part C: Studies in History and Philosophy of Biological and Biomedical Sciences, 43(4), 806-813. https://doi.org/10.1016/j.shpsc.2012.05.004
Eckel C. C., Grossman P. J. (2008), “Men, Women, and Risk Aversion: Experimental Evidence,” Handbook of Experimental Economics Results, vol. 1, C. Plott, V. Smith (eds.), 1061-1073.
Friedman M. (2008 [1953]), “The Methodology of Positive Economics” [in:] The Philosophy of Economics. An Anthology, D. Hausman (ed.), Cambridge: Cambridge University Press, 145-178.
Friedman M. (2009), “Final Word” [in:] The Methodology of Positive Economics. Reflections on the Milton Friedman Legacy, U. Mäki (ed.), Cambridge: Cambridge University Press, 355-356.
Fuller S. (2004), Kuhn vs. Popper: The Struggle for the Soul of Science, New York: Columbia University Press.
Grüne-Yanoff T., Marchionni C. (2018), “Modeling Model Selection in Model Pluralism,” Journal of Economic Methodology 25(3), 265-275. https://doi.org/10.1080/1350178X.2018.1488572
Guala F. (2005), The Methodology of Experimental Economics, Cambridge: Cambridge University Press. https://doi.org/10.1017/CBO9780511614651
Hamermesh D. S. (2013), “Six Decades of Top Economics Publishing: Who and How?,” Journal of Economic Literature 51(1), 162-172. https://doi.org/10.3386/w18635
Holt C. A., Laury S. K. (2005), “Risk Aversion and Incentive Effects: New Data without Order Effects,” American Economic Review 95(3), 902-912. https://doi.org/10.1257/0002828054201459
Hookway Ch. (2016), “Pragmatism” [in:] The Stanford Encyclopedia of Philosophy (Summer 2016 Edition), E. N. Zalta (ed.), https://plato.stanford.edu/archives/sum2016/entries/pragmatism/.
Hoover K. D. (2001), Causality in Macroeconomics, Cambridge: Cambridge University Press.
Hutchison T. (1938), The Significance and Basic Postulates of Economic Theory, London: MacMillan.
Hutchison T. (2000), On the Methodology of Economics and the Formalist Revolution, London: Edward Elgar Publishing.
Jacob B. A., Ludwig J. (2012), “The Effects of Housing Assistance on Labor Supply: Evidence from a Voucher Lottery,” American Economic Review 102(1), 272-304. https://doi.org/10.3386/w14570
James W. (1907), “Pragmatism’s Conception of Truth,” The Journal of Philosophy, Psychology, and Scientific Methods 4(6), 141-155. https://doi.org/10.2307/2012189
Jovanovic B., Szentes B. (2013), “On the Market for Venture Capital,” Journal of Political Economy 121(3), 493-527. https://doi.org/10.1086/670359
Mäki U. (1992), “On the Method of Isolation in Economics,” Poznań Studies in the Philosophy of the Sciences and the Humanities 26, 19-54.
Mäki U. (1994), “Isolation, Idealization, and Truth in Economics,” Poznań Studies in the Philosophy of the Sciences and the Humanities 38, 147-168.
Mäki U. (2009), “MISSing the World: Models as Isolations and Credible Surrogate Systems,” Erkenntnis 70(1), 29-43. https://doi.org/10.1007/s10670-008-9135-9
Mäki U. (2017), “Modelling Failure” [in:] Logic, Methodology, and Philosophy of Science: Proceedings of the 15th International Congress (Helsinki), H. Leitgeb, I. Niiniluoto, P. Seppälä, London: College Publications, 381-400.
Mäki U. (2018), “Rights and Wrongs of Economic Modelling: Refining Rodrik,” Journal of Economic Methodology 25(3), 218-236. https://doi.org/10.1080/1350178X.2018.1488475
Marchionni C. (2017), “Mechanisms in Economics” [in:] The Routledge Handbook of Mechanisms and Mechanical Philosophy, S. Glennan, I. Phyllis (eds.), London: Routledge, 423-434.
Mariyani-Squire E. (2017), “Critical Reflections on a Realist Interpretation of Friedman’s ‘Methodology of Positive Economics’,” Journal of Economic Methodology 24(1), 69-89. https://doi.org/10.1080/1350178X.2017.1279743
Maziarz M. (2018a), “Causal Inferences in the Contemporary Economics,” Mendeley Data. http://dx.doi.org/10.17632/v7dhjnd8xg.2
Maziarz M. (2018b), Disentangling the Philosophy of Economics, Warsaw: The Publishing House of the Institute for Market, Consumption, and Business Cycles Research — National Research Institute.
McCloskey D. N. (1998), The Rhetoric of Economics, Madison: University of Wisconsin Press.
Moneta A., Russo F. (2014), “Causal Models and Evidential Pluralism in Econometrics,” Journal of Economic Methodology 21(1), 54-76. https://doi.org/10.1080/1350178X.2014.886473
OECD (1994), Jobs Study: Evidence and Explanations, Paris: OECD Publishing.
Reiss J. (2007), “Do We Need Mechanisms in the Social Sciences?,” Philosophy of the Social Sciences 37(2), 163-184. https://doi.org/10.1177/0048393107299686
Reiss J. (2013), Philosophy of Economics: A Contemporary Introduction, London: Routledge.
Rodrik D. (2015), Economics Rules: The Rights and Wrongs of the Dismal Science, London: WW Norton & Company.
Russo F., Williamson J. (2007), “Interpreting Causality in the Health Sciences,” International Studies in the Philosophy of Science 21(2), 157-170. https://doi.org/10.1080/02698590701498084
Sacerdote B. (2007), “How Large Are the Effects from Changes in Family Environment? A Study of Korean American Adoptees,” The Quarterly Journal of Economics 122(1), 119-157.
Wible J. R. (1984), “The Instrumentalisms of Dewey and Friedman,” Journal of Economic Issues 18(4), 1049-1070.
Ylikoski P., Aydinonat N. E. (2014), “Understanding with Theoretical Models,” Journal of Economic Methodology 21(1), 19-36.
Zhou J. (2014), “Multiproduct Search and the Joint Search Effect,” American Economic Review 104(9), 2918-2939. https://doi.org/10.1257/aer.104.9.2918
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Published
2019-12-31
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Maziarz, M. (2019). Methodological Pluralism in Economics: The ‘Why’ and ‘How’ of Causal Inferences. The Philosophy of Science, 27(4), 43–59. Retrieved from https://fn.uw.edu.pl/index.php/fn/article/view/1104
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Filozofia Nauki/The Philosophy of Science | ISSN 1230-6894 | e-ISSN 2657-5868