assumptions controversy

Lawrence A. Boland
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
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Abstract

While the controversy concerning the realism of the assumptions of economic theory goes back to the mid-19th century, the issue today concerns only a reaction to Milton Friedman's famous 1953 methodology essay. That essay advanced the position that the assumptions of economic theory do not have to be realistic so long as they and the theories they form are useful. Many ideologically motivated critiques of this essay were published in the 1950s, 1960s and 1970s but all were problematic since they did not recognize that Friedman's essay was nothing more than a restatement of the common methodology called Instrumentalism.
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How to cite this article

Boland, Lawrence A. "assumptions controversy." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 22 October 2014 <http://www.dictionaryofeconomics.com/article?id=pde2008_A000231> doi:10.1057/9780230226203.0067

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