An Empirical Principle for Deductive Theory in Economics

Abstract

Economists have in recent years become increasingly concerned with a controversy of basic importance to numerous areas of scientific analysis. The controversy turns on the occurrence in theory of terms and statement-forms whose empirical content is not firmly established. That such concepts are found in economic theory is acknowledged by most economists. Nevertheless, two distinct schools of thought seem to be emerging among economists concerning their validity in economic theory. One school of thought holds that economic theories contain terms