Blockseminar: Epistemology & Economics
DATES: April 25-27, 2014
ASSESSMENT: 2 credits for attendance + presentation; 8 credits for attendance + presentation + term paper (ca. 4000 words)
DESCRIPTION OF THE SEMINAR: A 2013 paper by Reinhart and Rogoff was found by an student of economics to contain what became the most famous coding mistake in an economic spreadsheet. The paper showed that an an economy’s growth-rate decreases sharply once government debt exceeds 90% of GDP; thereby providing evidence that seemed to justify austerity measures across the world. Only, the conclusion was based on gross methodological mistakes (wrong coding, data selection, etc.) the authors of the paper had overlooked. But let us assume for a moment that the paper had contained no mistakes. Is a correlation found on a spreadsheet evidence for an economic policy? Are models good evidence for economic policy? Do historical arguments fare better or worse than models? Are the opinions of experienced economists to be valued more or less than an economic data model, a case study, a mechanistic model etc.?
In this course we will examine what it means to know something in economics. How do we establish facts and evidence about economic phenomena? The fundamental questions will be ‘what constitutes evidence, that is justification, in economic discourse?’ ‘What methods are available for gathering evidence in economics, and, for each, what are their desirable and undesirable traits?’ We will consider these and other questions mostly from the point of view of policy preparation. Because the science of economics is constantly evolving with new methods, new forms of social measurement, and so on, the question cannot be answered once and for all; therefore, the principal objective of the course will also be to arrive at an understanding of the main challenges for economics today. The close link between economics and policy making makes the problem of justification in economics all the more pressing, and that is, in essence, the nature of all epistemological problems for economic science.