Economic Methodology: A Historical Introduction.

Ever since the inception of economics over two hundred years ago, the tools at the discipline's disposal have grown more and more more sophisticated. This book provides a historical introduction to the methodology of economics through the eyes of economists. The story begins with John Stuart Mill's seminal essay from 1836 on the definition and method of political economy, which is then followed by an examination of how the actual practices of economists changed over time to such an extent that they not only altered their methods of enquiry, but also their self-perception as economists. Beginning as intellectuals and journalists operating to a large extent in the public sphere, they then transformed into experts who developed their tools of research increasingly behind the scenes. No longer did they try to influence policy agendas through public discourse; rather they targeted policymakers directly and with instruments that showed them as independent and objective policy advisors, the tools of the trade changing all the while. In order to shed light on this evolution of economic methodology, this book takes carefully selected snapshots from the discipline's history. It tracks the process of development through the nineteenth and twentieth centuries, analysing the growth of empirical and mathematical modelling. It also looks at the emergence of the experiment in economics, in addition to the similarities and differences between modelling and experimentation. This book will be relevant reading for students and academics in the fields of economic methodology, history of economics, and history and philosophy of the social sciences.

Observation and Observing in Economics

Two themes are generative for revealing and understanding the history of observation in economics. First, we argue for the importance of noting that observation is an activity as well as a result, and second that observation is no more identical with quantification than observing is with measuring. These two themes enable us to discuss different historical dimensions of the ways in which economists have observed their economies and so enlarge our understanding of their observational practices. These problematics especially help in delineating the intricate, multilayered, and active interactions between the observer and the observed that take place in all social science observation, and from which our pictures of the economic world emerge.

"A Hard Battle to Fight": Natural Theology and the Dismal Science, 1820-1850

William Whewell's and Richard Jones's criticism of Jeremy Bentham's and David Ricardo's "dismal" views on the relation of theory and evidence in political economy was motivated by the former's views on the structuring role of natural theology for questions of method and evidence in the sciences, including political economy. In comparison, natural theology was for Richard Whately as structuring on these issues as it was for the Cambridge men. Whately's view on natural theology, however, conformed with the Ricardian predilection for theory over facts. The differences between the Cambridge men and Whately became manifest after (or better: during) the publication of Jones's book on rent in 1831 and led to a somewhat acerbic exchange of views on the role of definitions in science and the use of history for establishing scientific evidence. As far as political economy was concerned, Whately's stance carried the day in Victorian England.

Making Things Technical: Paul Samuelson at MIT

This article examines how Samuelson defined his own role as an economist as a technical expert, who walked what he called the "middle of the road" to-seemingly-stay out of the realm of politics. As point of entry I discuss the highly tempting offers made by Theodore M. Schultz in the 1940s to come over to Chicago, which Schultz persistently repeated over three years and despite strong Chicago faculty resistance. A contrast between Schultz's own experiences as an economic expert at Iowa State, Samuelson's work as an external consultant for the National Resources Planning Board during the Second World War, and the firm support of the MIT administration for Samuelson's research serves to pinpoint the meaning of being technical for Samuelson, and the relation of the technical economic expert to the realm of politics.

Jevons, Mill and the Private Laboratory of the Mind

In this paper the rift between Jevons and Mill over the method of political economy serves as a prehistory to recent attempts of behavioural economists to once again explain economic behaviour by taking recourse to mankind's physiology. While Mill relied on the association psychology and its introspective method to establish indubitable first principles, Jevons scorned all recourse to introspection. As exemplified for Jevons's theory of labour, psychophysiology gave Jevons the means to think about economic behaviour in terms of functional form, and promised its assessment by means of experiments. Thus levelling down the Victorian distinction between mind and matter, Jevons turned political economy into social physics.

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Investimento direto externo, acumulação de capital produtivo e distribuição de renda: uma abordagem pós-keynesiana

It is developed a macrodynamic model in the post-keynesian tradition of political economy of the productive capital accumulation and income distribution to analyze some of the impacts of the (flow of) foreign direct investment and the (stock of) foreign productive capital on capital accumulation, economic growth and functional income distribution in a stylized economy. Alongside a usual demand effect, the impacts of such an internationalization of local capital through labor productivity and market concentration are taken into account as well.

The debt crisis: a re-appraisal

The 1980s' debt crisis is a landmark in developing economies' growth and stabilization. According to the most quoted empirical articles, external shocks and vicissitudes gave rise to crisis just because of delays in stabilization policies, engendered by internal conflicts and institutional immaturity. I review some of these papers, and find out some problems - in the measurement of shocks and foreign indebtedness, namely - whose corrections lead to opposite results: external shocks and foreign indebtedness explain that crisis regardless of domestic policies. At the same time, the strong correlation of income distribution to terms of trade changes and foreign indebtedness suggest that inequality may have contributed differently to that crisis: either through an economic channel, or through a political channel based on delays in reforms.

Still the century of government savings banks? The Caixa Econômica Federal

This article explores general concerns about government banking, social inclusion, and democracy through case study of the Brazilian federal government savings bank (Caixa Econômica Federal). Review of government savings banks in Brazilian history suggests that these institutions have been at the center of domestic political economy, expanding and contracting under a variety of political regimes and economic conditions. Since capitalization to meet central bank and Basel Accord guidelines in 2001, the Caixa has attempted to modernize, continue to serve as agent for government policies, and expand both popular credit and savings and investment banking activities.

An evaluation of the 2003 tax reform effort in Brazil

This paper provides an assessment of the tax-reform effort launched by the newly elected Lula government in 2003. It analyzes how the envisaged reform had to be changed and scaled down, in the wake of strong political resistance, after a failed attempt to develop a consensual proposal, fully supported by state-governors. The main effective changes are then evaluated. Challenges ahead are discussed at the end.

Fatores políticos e institucionais nas teorias contemporâneas sobre a expansão dos gastos públicos

This paper discusses the role of the political and institutional factors in the contemporary theories on the growth of government expenditures. Based on a comparative analysis of studies produced in the two last decades on the field of political economy, the analysis attempts to deal with the main assumptions, the types of explanation, and the causal status of political and institutional variables provided by these theories. The theories are classified according to the type of explanation and the causal primacy of different political and institutional variables in each model.

Sobre a economia política do desenvolvimento e a contribuição dos serviços

On the political economy of development and the contribution of services. This paper aims to ponder on recent approaches to Political Economy of Development, that bring about new concepts about the role of services activities in the economic development process. The analysis begins by checking the new attributions of services entailed by the productive paradigm changes that have occurred since the 1970's. Then, it examines the debate about the new kind of society, called "post-industrial", which is centered in the services dynamics. Finally, it discusses the relevance of social capital disponibility, as a prime factor to attain economic development

Modelos de crescimento kaleckianos: uma apreciação

The purpose of this article is to survey the main papers that founded a kaleckian approach of the economic growth. It presents a certain moment of the historical evolution of the non-neoclassical macrodynamics. This analysis can be understood under the political economy tradition in putting together social classes (capitalists and workers), distributive conflict and the relationship between distribution and accumulation.