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 | | The Methodology of Empirical Macroeconomics by Kevin D. Hoover ISBN-10: 9780521802727 ISBN-10: 0-521-80272-5 ISBN-13: 9780521802727 ISBN-13: 978-0-521-80272-7 Hardcover 2001-11-15 Cambridge University Press Find Lowest Price |
Editorials | ||
Product Description Economic methodology typically focuses on microeconomic theory. The Methodology of Empirical Macroeconomics breaks new ground by focusing instead on the genuine problems that arise for macroeconomists trying to relate theory to data. It demonstrates that with careful attention to actual macroeconomic practice, economic methodology and the philosophy of science help to resolve problems faced by working macroeconomists. Some issues addressed are: the relationship between theoretical models and empirical observations; microfoundations for macroeconomics; the scope and nature of economic laws, the role of idealizations, methodological individualism, and the problem of causality. | ||
Book Description Economic methodology typically focuses on microeconomic theory. The Methodology of Empirical Macroeconomics breaks new ground by focusing instead on the genuine problems that arise for macroeconomists trying to relate theory to data. It demonstrates that with careful attention to actual macroeconomic practice, economic methodology and the philosophy of science help to resolve problems faced by working macroeconomists. Some issues addressed are: the relationship between theoretical models and empirical observations; microfoundations for macroeconomics; the scope and nature of economic laws, the role of idealizations, methodological individualism, and the problem of causality. | ||
Download Description The Methodology of Empirical Macroeconomics stakes out a pragmatic middle-ground between traditional, prescriptive economic methodology and recent descriptive (sociological or rhetorical) methodology. The former is sometimes seen as arrogantly telling economists how to do their work and the latter as irrelevant to their practice. The lectures are built around a case study of a concrete example of macroeconomic analysis. They demonstrate that economic methodology and the philosophy of science offer insights that help to resolve the genuine concerns of macroeconomists. Some examples of questions addressed include: What is the relationship between theoretical models and empirical observations? What is the relevance of macroeconomics to policy? Should macroeconomics be viewed as a special case of microeconomics? What is the place of long-standing philosophical issues in macroeconomics, such as the scope and nature of economic laws, the role of idealizations, methodological individualism, and the problem of causality? | ||
Reviews | ||
Assuming a normal distribution without any goodness of fit test Hoover's(H)book demonstrates that macroeconomists are simply addicted to presuming in assuming :(a)that the law of large numbers holds,(b)that the central limit theorem holds,(c)that past,present,and future events are independent,(d)that continuity holds,(e)that business cycles are repeated events that are practically identical, and (f)that the normal probability distribution can be used.This entire book needs to be retitled , "Why the normal distribution is the foundation of empirical macroeconomics".It is not surprising that none of the scientific work of B.Mandelbrot appears anywhere in this book,since Hoover would not have written this book if he were at all familiar with any of Mandelbrot's 50+ years worth of studies demonstrating over and over again that the normal distribution,and the entire least squares-multiple regression and correlation approach based on it,leads to incorrect and fallacious answers.Did Pissarides,Granger,or Hoover check their data first for goodness of fit before assuming a normal distribution?.Unfortunately,the answer is NO.This is also the answer to the question,"Did any macroeconometrician do a goodness of fit test in the 20th century before publishing his work?"The only reason for reading this book is to observe the many errors of omission and commission committed by Hoover. It is interesting that Hoover is an associate editor and book review editor of the economics journal,The Journal of Economic Methodology,which purports to be on the cutting edge of methodological studies in economics in general and econometric methodology as well.In the 13 years that this journal has been in existence,this reviewer has been unable to find a single article that cites any major piece of Mandelbrot's work even once.The various published papers in econometric methodology instead concentrate on the ad hoc work of Granger and Engle,who received the Nobel Memorial Prize in Economics,for essentially adding more epicycles to the standard multivariate least squares(multivariate normal distribution) approach in a desperate attempt to save an approach that has been massively falsified empirically for over 50 years.Paul Cootner,a major econometrician,had already recognized the implications of Mandelbrot's work for economics in 1963.Paraphrasing Cootner,"If Mandelbrot is correct,then econometrics will have to abandon any type of least squares approach".Mandelbrot is correct.It is not surprising that Hoover has joined the econometricians in their desperate attempt to " modify " econometrics . | ||