Logic In Its

Logic In Its

Logic. In its analysis of events, economics follows the logical methods of reasoning used in all the 'empirical' sciences, that is, those conducted by experiment. An event can be said to be scientifically (causally) explained or established by demonstrating cause and effect, when its occurrence can be deduced from a universal statement ('law', 'theory', 'hypothesis') in conj unction with a statement about a particular event. For example, a causal explanation of boiling water requires a hypothesis about the boiling-point of water in terms of heat required, and a particular statement about the heat applied in the given instance. From the universal statement or hypothesis a prediction can be made that the water will boil at a stated temperature. The statement which completes the causal explanation is that the temperature was exceeded. Broadly, the particular statement describes the 'cause' of the occurrence, and the specific prediction or deduction describes the 'effect'. All empirical sciences are thus systems of hypotheses from which a picture of the world can be obtained by pure deduction. The progress of scientific knowledge as a whole consists of an endless intuitive search for hypotheses which have increasingly larger powers to explain and which are capable of being tested, since it is only by its ability to stand up to repeated critical tests without being refuted that the accuracy of a theory or an hypothesis can be judged.

Economics similarly seeks to establish statements that are universally applicable and which will both support explanation and be capable of being tested. For example, from hypotheses relating to total demand and the distribution of wealth in the form of different kinds of asset in the economy it is possible to deduce specific predictions or conclusions about inflation and the general level of interest rates. Events discipline such speculations by forcing them to submit to the test of observed facts. Disagreement between speculation and event would refute the premise from which the conclusions were derived or indicate weaknesses in the theory.

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Since then his writings have in turn been increasingly reinterpreted as a special case both by some followers and by some economists who had not wholly accepted his writings. The content of economics is in a state of change, and this consumeraffairs.org.uk site is therefore not a final statement of economic doctrine.

Economics is in the last resort a technique of thinking. The reader will therefore need to make an intellectual effort, more substantial for some web entries than for others, to get the most interest and value out of this website.