Question

• Benjamin Disraeli once said ‘there three sorts of lies: lies, big lies and statistics.’ If one of the co-founders (Jevons) claim that for economics to be an exact science, a perfect system of statistics is necessary, while the other co-founder (Walras) rejects the use of statistics, even though both praise mathematics and quantative analysis, how to resolve this contradiction?

Answer 1

Economics as a discipline which considered as the mother of social science. It played an important role from the 19th century. It studied about the scarce resources in an economy. It explains how the scare resources distributed among population to ensure the welfare of the people. While looking through this format, economics do not need any mathematical explanation. The economist formed theories on the basis of the market structure and necessary policy needed for the economy. It studied about the social efficiency, information regarding market choices, opportunity cost decisions, consumer behaviour, forecasting of the economy etc. Economics as a social science deals with the socio economic aspects in the country. Some economists said that there is no need of any mathematical forms in economics.
On the other hand, economics is closely related to mathematics and statistics. Without mathematics, the economic theories do not have any empirical backup. The statistics can be used to explain the significance of the theory in current situation and future also. Mathematical economics emerged as one of the most vibrant discipline in economics. The use of mathematical formulas and statistical ideas give more accurate theories in economics. While making models, these measures can be used to find the relation between dependent and independent variables. There is a linearity in relationship can be find through this.
For example, look at the demand function. The demand is negatively related to the price is the most fundamental theorem without using any mathematical form. On the other hand this can be explained through mathematical form like Q= a-bP. Here the negative symbol shows the relationship of the function. So, the mathematical explanation gives more accuracy than the descriptive sense.