Is economics a science?

Greg Mankiw discusses whether Economics is a science or not, in response to this post from Don Luskin.

Don has two points. The first is that Economics is not a science because there is no ability to repeat experiments (which is common to many disciplines: astronomy, geology, archaeology, evolutionary biology, meteorology and paleontology (and all the branches therein)).

However, Don’s second issue:

Where is the utterly essential ingredient of repeatable experimental verification of falsifiable hypotheses?

Is quite simply wrong. Indeed, all of the discplines I mention above have a rich history of making predictive hypotheses based on observations, and determining if the predictions came true. That is why we expect tornadoes in the midwest, hurricanes in the summer and fall. That is why we expect prices to increase if supply diminishes, given fixed demand, and why we do not expect prices to increase with increased supply and fixed demand. That is why we can predict that there was a common fossil ancestor to both ants and wasps, and then, lo and behold! discover that this fossil ant exists.

The key metric of what is science and what isn’t is the ability to predict what is likely to happen given past results – which is the core of a falsifiable hypothesis. Relicable experiments are just one of the ways that these predictions can be analyzed. Certainly a falsifiable experiment that can be replicated many times is easier to prove or disprove than a prediction about the origin of the Universe. But Stephen Hawking and Albert Einstein made all sorts of predictions about the makeup of Universe, without the ability to create a replicable experiment. (At least, I’ve never heard of them creating any black holes in their laboratories). Those predictions have led to significant benefits for humanity, using rigorous analysis and producing testable hypotheses.


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