Some Reflections on the Relation Between Economic Theory and Empirical Reality

Abstract

The starting point of this methodological paper is the idea from the philosophy of science that theories in empirical sciences only become meaningful as a result of the fact that statements about empirically observable phenomena can be logically derived from them. The statements are applications in particular cases of empirical generalizations, as the hypotheses on the lowest abstraction levels are called. The empirical generalizations must contain magnitudes which have, explicitly stated or tacitly understood, operational definitions by which they can be calculated on the bases of measurements of directly observed magnitudes.

The author is deeply indebted to Professor Tord Palander and the members of his seminar at Uppsala University for several valuable discussions on the subject. Likewise, the author is indebted to Professor Harald Dickson, who has drawn his attention to many obscure points in the manuscript, and to Professor Hakan Tornebohm, who has suggested a more tolerant attitude to actual practice of scientific research than that, represented by the writings of logical empiricists, which inspired this paper.