When does an economic theory become true?
When does it satisfy requirements for true knowledge, e.g. similar to those in empirical sciences?
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Sign up to join this communityWhen does an economic theory become true?
When does it satisfy requirements for true knowledge, e.g. similar to those in empirical sciences?
It's just the same as in the physical sciences:
an economic theory, like any theory or model in physics or chemistry or biology, is wrong (H/T George Box), but it can be useful.
"True knowledge" is not a really a useful concept; not in physical sciences, not in social sciences. The important question is whether a model gives us useful insights, and whether it can constructively inform decisions.
An economic theory gains acceptance when it turns out to be useful.
When - just as in physics of any other science - testable predictions fit observed data. It's "true knowledge", and neither is any theory in any science, but rather, empirically observed behavior that matches what the framework/theory predicts. That's a good benchmark for good theory.