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Why economic theory is not self-correcting

October 2, 2016

This is about the hard sciences mostly, but fits into my astonishment that Keynesian economics seems to survive every failure: Why Science Is Not Necessarily Self-Correcting.

In the absence of replication efforts, one is left with unconfirmed (genuine) discoveries and unchallenged fallacies. In several fields of investigation, including many areas of psychological science, perpetuated and unchallenged fallacies may comprise the majority of the circulating evidence.

Of course, with economics we are not even dealing with replicatable experiments but simply the received theory that is built into the models that are used to test them. It does seem to me that economists only look at models and never at what’s going on outside their windows in the actual economy. And although few economists even know this, the datasets they use – such as GDP, the CPI and the unemployment rate – are almost entirely designed to deceive rather than enlighten.

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