Some Methodological Aspects of the Controversy between Mainstream Economics and Institutionalism

The Center for the History of Political Economy Working Paper Series, 2017-09

26 Pages Posted: 7 Apr 2017 Last revised: 8 Apr 2017

Peter Galbács

Budapest Business School

Date Written: April 6, 2017

Abstract

Mainstream economics has been running the gauntlet of adverse criticism for decades. These critiques claim as a message of central importance that mainstream economics has lost its relevance as for understanding reality. By making a brief comparison between the methodological strategies of the main stream and institutional economics I suggest that the firm demarcation between the streams stems from the difference between their methodologies. Its peculiar interest directed mainstream economics to take a unique methodological path and consequently the adherents have not been able to be on the lookout for certain facets of socio-economic reality. However, the chosen path, the axiomatic-deductive strategy proved to be an appropriate method for identifying economic laws. This claim is justified even by some recent efforts of new institutional economics. In order to support the conversation between the schools I highlight some causes that currently make it impossible to start a rational discourse.

Keywords: mainstream economics, institutional economics, methodology of economics, isolation, homo oeconomicus

JEL Classification: B13, B15, B41, C12

Suggested Citation

Galbács, Peter, Some Methodological Aspects of the Controversy between Mainstream Economics and Institutionalism (April 6, 2017). The Center for the History of Political Economy Working Paper Series, 2017-09. Available at SSRN: https://ssrn.com/abstract=2947864 or http://dx.doi.org/10.2139/ssrn.2947864

Péter Galbács (Contact Author)

Budapest Business School ( email )

Buzogány utca 10-12
Budapest, H-1149
Hungary

HOME PAGE: http://www.uni-bge.hu

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