Crisis and Methodology: Some Heterodox Misunderstandings

Real-World Economics Review, Issue No. 63, 25 March 2013, pp. 98-117

20 Pages Posted: 28 Mar 2013 Last revised: 2 May 2013

See all articles by Egmont Kakarot-Handtke

Egmont Kakarot-Handtke

University of Stuttgart - Institute of Economics and Law

Multiple version iconThere are 2 versions of this paper

Date Written: March 25, 2013

Abstract

Whether justified by the concrete circumstances or not, an economic crisis is, by simple association, taken as an implicit refutation of the invisible hand vision and the underlying theory. The fundamental heterodox critique locates the source of apparent theoretical difficulties at the level of methodology. Although acceptable in principle, this belief involves some actual misunderstandings with regard to the respective roles of deterministic laws and deductive reasoning. In order to clarify these, the present paper revisits some key episodes in the history of economic methodology.

Keywords: financial crisis, intellectual crisis, power of ideas, material consistency, logical consistency, determinism, deductive method, failure of reason, common sense, domain of economics, Cournot’s Unfitness Proposition

JEL Classification: B10, B20, B41

Suggested Citation

Kakarot-Handtke, Egmont, Crisis and Methodology: Some Heterodox Misunderstandings (March 25, 2013). Real-World Economics Review, Issue No. 63, 25 March 2013, pp. 98-117. Available at SSRN: https://ssrn.com/abstract=2240266

Egmont Kakarot-Handtke (Contact Author)

University of Stuttgart - Institute of Economics and Law ( email )

Keplerstrasse 17
Stuttgart
Germany

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