Question

 

There is great controversy on the methodology used in economics. Economists like Robbins, are in the opinion that, economics is rightly be called as a science. While critics argues that economics is not a science as economics fails to satisfy some of the attributes of science. What do you think? Is economics a science or not? Justify your answer by analyzing any five attributes of science.

 

Answer 1

Economics is not a science.

Refering to different versions of economics, there are different school of thoughts like - Neo classical economics (Adam Smith), then came Keynsian economics. Others are monetarists and austrains. Recent economics is new classical economics.

All the school of thoughts refers to different level of reliability and effectiveness of fiscal policy and monetary policy. These thoughts argue on the basis whether the business cycle are run by market forces or they occur due to the interventions by government and central banks.

1. It is not objective. Economic data can be subjective. Different indicators may indicate different phases in business cycle.

2. It is not verifiable. In economics, if money supply increases, then the real output may or may not increase. If increases a theory defined as keynesian supports it, if not increases then quantity theory supports it. Also, even if real output increases, it cannot be verified whether it increased because of increase in money supply.

3. It is not reliable. Decrease in interest rates may not reduce liquidity. People may not borrow, banks may not extend credit. So, cannot rely on monetary policy and its effect on money supply.

4. It cannot be precise. As explained above in point 3.

5. It cannot be accurate. The effect of monetary and fiscal policy cannot be measured reliably, accurately and precisely.