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Econometric Methodology in Radical Economics

1977; American Economic Association; Volume: 67; Issue: 1 Linguagem: Inglês

1944-7981

Dale J. Poirier,

Economic Theory and Policy

Economics, whether radical or bourgeois, is concerned to a large extent with quantitative matters, and hence, it is not surprising that economic analysis turns towards statistical description and verification of abstract theorizing. This propensity towards quantitative methods is by no means a recent phenomenon. Primitive quantitative methods were evident in the tableaux of the physiocratic school and in the Malthusian population and Paretian distribution formulas. However, economists as diverse as Lawrence Klein (p. 416) and Joan Robinson (p. 76) have noted that the major impetus to the recent quantification of neoclassical economics has been economics. Unlike bourgeois economics, radical economics has not undergone anything akin to a Keynesian revolution, so that comparatively speaking, it has remained largely unquantified. The main theme of this study is that there is nothing intrinsic in radical economics which precludes quantification and, hence, econometric analysis. The radical literature can be characterized in part by its paucity of empirical analysis, and while it might be argued that this has been at the expense of a wider acceptance of radical doctrine by bourgeois economists, it will be argued here that more importantly, it has been at the expense of a more sound scientific foundation for radical analysis. I. Econometrics: Positive or Normative? In this essay will be distinguished from what has been called empiricism. Martin Bronfenbrenner (p. 12) has defined immanent empiricism as the doctrine which professes that if one looks at enough facts or cases long and hard enough, general solutions (or acceptable compromises) will become clear, less, by formal logic than by 'insight,' by 'vision,' by analogy, or sometimes by 'compulsive comparisons.' In contrast empiricism will be used here to describe the doctrine which tempers immanent empiricism with inductive reasoning based on a body of theory. Empiricism involves the concurrent development of theory and observation, and in this sense, it is an intrinsic element of scientific inquiry. As Robert Heilbroner (p. 18) has said: 'essentially the claim to being a scientific procedure rests on nothing more than a subscription to orderly repeatable methods and to the willing submission of hypothesis to empirical testing. In economics the methodology by which theory and observation are related, using appropriate methods of inference, is know as econometrics. The important distinction between the statistician and the econometrician is that the latter employs her or his statistical tools to the analysis of economic models. These economic models are the products of economic paradigms, and these paradigms serve as the bases for which endogenous versus exogenous classification and identifying restrictions are made. When the researcher replaces the statistician's hat with the econometrician's hat, then these actions involve statements conceming the economic operation of the real world. These actions serve as a source for normative inputs into econometrics. For years the debate over whether economics is a positive or a normative science has padded the publication *Associate Professor, Department of Political Economy, University of Toronto. Gratitude is owed to numerous individuals whose comments at various stages of development aided in preparation of this final draft; however, the opinions expressed here are the sole responsibility of the author.