Economic methodology

Social science - definition

The study of human society and social relationships.

How is economic methodology different to that of a natural science?

Economists can’t control variables like a scientist can in an experiment.

Because economies are dynamic

How do economists test?

1. Build models to simplify reality

2. Make a range of assumptions.

Ceteris paribus - defintion

Assuming all other factors will remain constant when analysing the relationship between variables.

Positive statement - definition

Objective, fact based comments that can be tested

Not influenced by opinions of others

Normative statement - defintition

(Value statements)

Subjective, opinion based comments that are difficult to test.

How are policies made based on those types of statements?

Use a combination of both, to predict the impact both economically and use value statements to predict the moral/ social impact.