The Limits of Numerical Probability: Frank H. Knight and Ludwig von Mises and The Frequency Interpretation
2007; Springer Science+Business Media; Volume: 10; Issue: 1 Linguagem: Inglês
10.1007/s12113-007-9005-3
ISSN1936-4806
Autores Tópico(s)Economic Theory and Institutions
ResumoBoth Frank H. Knight and Ludwig von Mises are recognized as founders of intellectual traditions: the Chicago School and the neo-Austrian School of economics, respectively. During their lifetime, Knight and Mises were engaged in controversies regarding the nature of socialism and capital (Knight 1941, pp. 409–27; 1936, pp. 255–66; 1938, pp. 267–68; Mises 1966, pp. 490–93, 848f.). My focus here, however, will be on a systematic yet rarely noted similarity in the works of Knight and Mises. In particular, both are representatives of the frequency interpretation of probability and share a similar view concerning the limitations of probability theory in economics and the social sciences generally. 1 In the following I will (1) briefly restate the principles of the frequency interpretation of probability; (2) show why Knight and Mises must be considered frequency theorists; and (3) discuss and evaluate the arguments provided by Knight and Mises against the possibility of applying probability theory in the area of economic forecasting (whether on the micro or the macro level).
Referência(s)