publication . Article . 2011

Ronald Coase and the Methodology of Economics

Sam Peltzman;
Open Access
  • Published: 01 Jan 2011 Journal: The Journal of Law and Economics, volume 54, pages S15-S29 (issn: 0022-2186, eissn: 1537-5285, Copyright policy)
  • Publisher: University of Chicago Press
Abstract
AbstractRonald Coase was skeptical that economics is a positive science in the sense made famous by Milton Friedman. According to Coase, that notion is inaccurate on two counts: economists accept much theory without bothering to test it empirically, and much of their empirical work does not test theory. Coase’s view is that we seek (and find) truth in economics via a competition of ideas that uses an eclectic variety of methods. I argue that, as a description of what empirical economics is about, much of Coase’s critique is valid, even understated. However, I contend that Coase failed to appreciate some of the costs and benefits implied by his critique. For exam...
Subjects
free text keywords: Economics and Econometrics, Law, Empirical work, Economics, Test theory, Economic methodology, Cost–benefit analysis, New institutional economics, Skepticism, media_common.quotation_subject, media_common, Coase theorem, Positive economics
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