1. Chapter 1: Introduction Questions for Review and Discussion (pp.13) 1, 2, 4, 9

2. Primary Aim of Text Chart the development of economic thought over time Demonstrate how past mainstream thought has contributed to the scope and content of modern economics

3. Components of Economic Thought Vision – broad perception of an economic system Theory – formal models that capture the vision of economic systems

4. Historical Mechanism to deal with Scarcity 1.Brute force 2.Tradition 3.Institutional authority 4.Markets

5. Focus of Microeconomics Focus on stability and growth of aggregate measures of an economic system

6. Sociology of Economic Knowledge 1.Relativist school Most influential prior to 1950’s Considers the historical, economic, social and political forces that shape the content of emerging theories

7. 2. Absolutist (Whig) School Progress of theory depends on the discovery and explanation of unsolved problems or paradoxes by professional economists reacting to intellectual developments within the profession

8. Heterodox Approaches Read pp. 5 to 10 on your own Positive Economics What is Focus on impersonal forces that govern economic activity David Ricardo

9. Normative Economics What should be Integrates economic theory with ethics Welfare economics

10. Art of Economics Concerned with public policies Marshall

11. Methods of Empirical Reasoning Induction – Proceeds from statistical information of people, places, and ‘events’ (or activities) to general concepts Deduction – Applies clear and distinct theories to practical “events”

12. Abductive – Mix of two approaches -- Combines history,institutions and empirical study to gain insights into complex systems where definitive theories are beyond ones grasp -- Heuristics

13. Appendix: Evolution of Methodological Thought (pp. 17-21) Logical Positivism Provided a scientific method with philosophical foundations Originated with the Vienna Circle Scientists develop a deductive structure (a logical theory) that leads to empirically testable propositions

14. Dominant philosophy in the 1920’s and 1930’s The purpose of science is to establish a “truth”

15. Popper’s Falsification Empirical tests do not establish the truth of a theory, only its falsity An experiment that yields the predicted result indicates that the theory is not false

16. Scientific Paradigms Thomas Kuhn A given approach and body of knowledge is built into a researchers analysis “Normal Science” seeks to solve puzzles and paradoxes posed by the framework of the dominant paradigm Change occurs by revolution

17. Research Programs Imre Lakatos Existing theory may not embody the “truth” There are competing research programs, each involve: 1.Analyzing and attempting to falsify a set of data 2.Unquestioned acceptance of a set of hard-core logical postulates

18. Rhetorical Approach to Methodology Emphasizes the persuasiveness of language

19. Sociological Approach to Methodology Focus on social and institutional constraints influencing the acceptability of a theory

20. Method of Abduction An eclectic approach Researchers never know with certainty whether theory is true or false They accept the most promising ideas as tentatively true working hypotheses