Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155455
Authors: 
Pinzón-Fuchs, Erich
Year of Publication: 
2016
Series/Report no.: 
CHOPE Working Paper 2016-26
Abstract: 
This paper discusses a longstanding debate between two empirical approaches to macroeconomics: the econometrics program represented by Lawrence R. Klein, and the statistical economics program represented by Milton Friedman. I argue that the differences between these two approaches do not consist in the use of different statistical methods, economic theories or political ideas. Rather, these differences are deeply rooted in methodological principles and modeling strategies inspired by the works of Léon Walras and Alfred Marshall, which go further than the standard opposition of general vs. partial equilibrium. While Klein's Walrasian approach necessarily considers the economy as a whole, despite the economist's inability to observe or understand the system in all its complexity, Friedman's Marshallian approach takes into account this inability and considers that economic models should be perceived as a way to construct systems of thought based on the observation of specific and smaller parts of the economy.
Subjects: 
Lawrence R. Klein
Milton Friedman
macroeconometric modeling
Cowles Commission
National Bureau of Economic Research
empirical approaches to macroeconomics
controversy on scientific illusions
Walras-Marshall methodological divide
JEL: 
B22
B23
B4
C50
E00
Document Type: 
Working Paper

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