Abstract
The article is aimed at reconsidering the question if the project of econometrics can be read in line with scientific realism. Previously, the methodological literature focused on the philosophy of econometrics, voices criticizing realist interpretations of econometrics were raised. The criticism was aimed at showing that econometric models lack robustness. The use of slightly different methods leads to obtaining different and often contrary models what supposedly undermine the project of econometrics. In this article, I aim at offering a new argument in defence of the current practice of the economists devoted to the empirical branch of macroeconomics. To do so, I apply Uskali M?ki?s (2009) model of representation to three case studies of contradictory pairs of econometric models and argue that contrary results are not necessarily a drawback of econometrics. Instead, the seemingly contradictory pairs of models are useful in various contexts constituted by their purpose and audience.
Highlights
The criticism is based on discussing a feature of econometrics absent from the hitherto methodological literature, i.e., the sensitivity of econometric models to: (1) small changes in data sets; and (2) method and showing that none of the realist positions in the philosophy of economics appropriately interpret the empirical branch of macroeconomics
I applied Mäki’s (2009) model of modelling to defending the realist interpretation of econometrics and showed that contrary results obtained by econometricians depend on the pragmatics of estimated models
I analysed three case studies: Sala-i-Martin’ (1997) remarks on growth macroeconomics, Reinhart-Rogoff controversy, and two types of research focused on empirical verification of the expansionary fiscal contraction hypothesis
Summary
There are two kinds of commitments connected to scientific realism: ontological and epistemic. Cartwright (1989) seems to be optimistic about econometrics and holds a similar point of view She argued that coefficients estimated by econometricians should be read out in a “Emerging Contrary Result” Phenomenon and Scientific Realism realist way, as probabilistic, causal laws. 149-150) delivered two arguments for interpreting estimation of the law of demand in a realist way She noted that such regressions (cf Equation (1)) represent causal relationship, and not a mere functional relationship of the kind Russell thinks typifies physics and grounded this viewpoint in the beginnings of economics and works of the Cowles Commission. Below, I reconstruct the recent critique of being a realist about econometrics and, in Section 2 and 3, attempt to read the realistically reconstructed project of econometrics in a realist way
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