Larry Summers at Bretton Woods:
“I have always been an empiricist, so I will be happy to say that if Britain enjoys a boom over the next two years coming from increased confidence, I will be required to quite radically rethink my view of how the macroeconomy operates, and to be quite contrite about the seriousness of the misjudgments that I am making.”
Read the full quote here.
Sorry if I bet that the facts in two years won’t change Larry Summers mind about anything. During weekend religious services economist bow down and pray allegiance to empirical evidence, and Monday thru Friday they forget their prayers and do anything and everything to advance their scientistic and ideological “priors” — and their beloved mathematical hobby horse of the moment — bending the facts to fit whatever prior beliefs they have always held. If you study academic economists like an entomologist studies ants, this is what the data have consistently revealed.
If things work out contrary to Summers’ expectations about Britain — and Summers in fact rethinks his macroeconomics and acknowledges the massive empirical failure of his whole scientific outlook on this matter — I’ll die my hair pink.
better buy that dye now …. england isn’t going to be booming over the next two years.
Steve, it’s a conditional with two steps …
If empirical evidence changed anyone’s mind, Keynesian econ would no longer be with us!
BTW, Austrian econ is the real empirical science. I was reading Hayek’s “Socialist Calculations” yesterday and ran into this:
“In the social sciences it is the elements of the
complex phenomena which are known beyond the possibility of dispute.
In the natural sciences they can be at best only surmised. The
existence of these elements is so much more certain than any regularities
in the complex phenomena to which they give rise that it is they
which constitute the truly empirical factor in the social sciences…The essential
difference is that in the natural sciences the process of deduction has
to start from some hypothesis which is the result of inductive generalizations,
while in the social sciences it starts directly from known
empirical elements and uses them to find the regularities in the complex
phenomena which direct observations cannot establish. They are,Socialist Calculation
so to speak, empirically deductive sciences, proceeding from the known elements to the regularities in the complex phenomena which cannot be directly established.”
Pages 126,127 of Individualism and economic order.