This website uses cookies to ensure you have the best experience. Learn more

Using A Simple And Well Known Economic Model As An Example, Evaluate Friedman’s Instrumentalism

1977 words - 8 pages

Introduction
Since the 2008 financial crisis, economists have been blamed for their incapability to predict the collapse of the financial system with economic models. It has been widely debated about the role of economic models, in particular their underlying assumptions and their ability to predict the upcoming events. Colander et al pointed out that unrealistic assumptions plays a main role in the failure of economic models (Colander et al 2009: 7-10). Opponents would invariably point their fingers towards Friedman’s ‘Methodology of Positive Economics’; where he proposed that the validity of assumptions is totally irrelevant when evaluating economic models, only the usefulness of ...view middle of the document...

Rather, they can be jointly benefitted from trade. As it assumes away the effects of trade on distribution of income within countries, international trade is advantageous to both countries in the model.

Friedman’s Instrumentalism
Friedman’s profound position can be summarised as follows (Friedman 1953: 7, 14):
The goal of science is, via the development of hypothesis, to achieve ‘valid and meaningful’ predictions to unobserved phenomena and that the ‘realism’ of assumptions does not matter
Friedman emphasizes that the success of predictions that a model yield is independent of the truthfulness of the underlying assumptions. Here, by the ‘truth’ of assumptions means the ‘descriptive reality’ of the real world. Once economists have obtained a useful model, the underlying assumptions are practically redundant. He explained by using Galileo’s falling body example (Friedman 1953: 16-19). By assuming zero air resistance, the equation yields a ‘well enough’ prediction in the distance travelled of a falling object. However, he ignores the fact that on Earth, nothing drops in a vacuum and that the assumption is vastly incorrect. He argues that since we know that the model provides good reality approximations to a majority of bodies, it is still a credible theory despite exceptional cases such as a falling feather.
Although he has two other sub-claims regarding the relationship between the significance of theories and realism of assumptions, for the purpose of this essay, I will only focus on his main assertion, which is explained above.
Friedman concerns only the methodology side of the hypothetical entity, not the epistemological side of the coin. Wong was the first to identify that Friedman was methodologically an ‘instrumentalist’ (Wong 1973: 314). Instrumentalism disregards the descriptive accuracy in a theory’s assumptions so long as the subsequent conclusions are correct. According to their view, theories are best to viewed merely as instrument tools and therefore it is meaningless to judge their falsity. Rather, one should evaluate the adequacy of prediction. The verification should be done by testing the result approximations against reality.
I have now reconstructed Friedman’s account of instrumentalism. Now I shall proceed to discuss my two claims in detail.

Vagueness of ‘Assumptions’
As we are taking underlying factors for granted, the validity of these factors should therefore affect the subsequent result. It is important to consider the roles of each specific assumption and weigh them against the success of the theory. What is relevant is not whether the assumptions are completely true, but whether their falsehood matters for adequate approximations.
The identification of ‘assumptions’ made by Friedman is somewhat vague. Clarifications have been made by Musgrave (Musgrave 1981: 378-87). The ‘no transportation cost’ assumption in the Ricardian model, according to Musgrave, would fit the status of a negligible assumption. As...

Find Another Essay On Using a simple and well-known economic model as an example, evaluate Friedman’s Instrumentalism

Ceremony of Initiation for a Coven - an example of modern witchcraft, otherwise known as Wicca

2341 words - 9 pages yet has not won its deepest secrets, them I will teach her, in truth, all things as yet unknown. And you shall be free from slavery, and as a sign that you be free you shall be naked in your rites. Sing, feast, dance, make music and love in My presence, for Mine is the ecstasy of the spirit and Mine also is Person Ay on earth. For My law is love unto all beings. Nor do I demand aught of sacrifice, for behold, I am the mother of all things and My

This is an example of What is known as an OPORDER

1145 words - 5 pages squad ambushes. Significant to this operation is allowing the enemy elements to move through supporting ambushes without being detected, thus isolating the main effort and maintaining the element of surprise. Success is defined as all enemy personnel in the kill zone destroyed and no casualties.1. Maneuver: 1st squad 1st platoon will cross the LD NLT 071500 Nov 02 moving in a sqd column fire team wedge along route White. 1st squad will establish an

An example of The policy cycle in New Zealand using Homosexual Law Reform Act 1986 as a case study

2653 words - 11 pages based on moral and religious grounds; that homosexuality was "unnatural" and that the bible condemned it. Individual Christian political activists such as Keith Hay, Peter Tait and Norman Jones created an interest group the Coalition of Concerned Citizens (CCC) in order to distribute a petition against the act. In September the anti-reform petition was presented at parliament. It was claimed that they had 800,000 signatures. However

"There is more to poetry than moods and feelings, using Sylvia Plath's poem "Cut" as an example

1615 words - 6 pages and mentality. Therefore, if a piece of poetry was studied carefully enough, the audience would be able to uncover many deep and personal aspects of the poet, as well as learning of their opinions. Sylvia Plath's poem Cut is an excellent example - it successfully and effectively conveys all of the aforementioned information to the audience.The poem Cut written by Sylvia Plath is a reflection of her mental state and schizophrenic tendencies that

A thorough look at the psychological disorder of sociopathy, with links made to Charles Dickens' novel "Great Expectations", using Estella as an example of a sociopath

3161 words - 13 pages , such as for stealing, "My mother is sick and she needs the money". Surprisingly, through great manipulation skills, sociopaths often get away with their actions based on simple excuses such as the one above.Whilst all of the characteristics outlined above are common in many sociopaths, it is the lack of conscience, emotion and remorse, which are constant for all sociopaths, as well as the ability (and will) to manipulate. A scientific test was

The Role of Social Media in Political rallies, using Taiwan’s recent protest as an example

1491 words - 6 pages . To conclude, social media had been used as an essential tool for modern civil protests especially in the Asian region and the Taiwanese Sunflower Movement is an ideal example as social media had been used extensively. With it’s characteristics of being easily accessible, social media are suitable for civil protest as it allows massive amount of first hand informations to be shared in the quickest time and the Sunflower Movement had been using

Year 9 Health Response (Tobacco) Using the decision making model as a reference and guide address the following situation

1965 words - 8 pages Decision making model: You are with a group of close friends and they are trying to get you to try smoking tobacco, marijuana or drinking alcohol. They want to get together tomorrow and try it. In essay form, outline the process you would go through to make the decision as to whether you do or don't. Include all the facts and information you have accumulated in order to make an educated decision.In this situation, I am with a group of close

The Gilded Age, it earned a reputation of widespread corruption in government and business, as well as persistent economic, social, and political problems facing the nation

703 words - 3 pages In the years following Reconstruction, America changed from a country of farms into a nation of growing businesses, factories, and cities. Despite these changes, the decades of the Gilded Age earned a reputation of widespread corruption in government and business, as well as the failure of the era's Presidents to resolve the persistent economic, social, and political problems facing the nation.The rise of industry and business defined the period

Evaluate empiricism as an ideology and methodology for writing history

1257 words - 5 pages their time. Through the examination of historical practices over time, it has proven difficult to provide society with an accurate portrayal of the truth.Each composer of history has utilised differing techniques to illustrate an interpretation of the past. For example, ancient historians such as Herodotus interpreted history through story telling, incorporating elements of myth, which is a reflection of that societies beliefs, values, customs

Examine and evaluate as well as conclude figures and projections of world-wide poverty - Monash university - Assignment

517 words - 3 pages 10 percent. 3.) INCREASED EMPLOYMENT: Government policies put in place to create jobs and alleviate unemployment have also contributed to the decline in poverty rates. For example, the United States of America introduced unemployment insurance as a plot to decrease unemployment levels. 4.) THE ROLE OF TECHNOLOGY: The emergence of technological trends and changes paved the way for economic developments, which aided the industrial

Operationalization Using Known Scales and Instruments

1481 words - 6 pages Section A: Operationalization Using Known Scales and Instruments Description The Davidson Trauma scale is a self-report inventory that measures how often and how severe posttraumatic stress disorder (PTSD) symptoms appear in adults. (Carlson, 2012). The scale is administered with paper and pencil. There are 17 items in the scale that reflect closely the criteria of diagnosing PTSD according to the fourth edition of the Diagnostic and

Similar Essays

Is Totalitarianism An Essentially Enlightenment Phenomenon? This Essay Will Argue That It Is An Economic And Political Model Born From The Modern European Experience Using Soviet Model As An Example

2377 words - 10 pages The objective of this essay is to discuss totalitarianism, specifically to identify ways in which totalitarianism is 'European' and 'Modern'. The Soviet Union, expressly the period between 1924 and 1953 when Joseph Stalin was Secretary General of the Communist Party of the Soviet Union (CPSU), will be used as an example to highlight that it was an economic and political model born from the modern European experience.For a country or state to be

Tourism's Economic Benefits Are Well Known, But Concern Has Been Rising Over Its Environmental And Social Impacts: Cyprus

3139 words - 13 pages Tourism's economic benefits are well known, but concern has been rising over its environmental and social impacts. Using a destination of your choice as a case study, show how these impacts have changed in the past and how policy makers and managers have responded to these changes.Tourism has had a profound and irreversible impact on many destinations worldwide. As the demand to travel to these destinations increases, there is an unrelenting

A Look At Communication At Hitachi Automotive Products Mgt 331: Organizational Behavior (Provide Example Of Successsful And Unsuccessful Communication Using Process Model.)

956 words - 4 pages prevented a potential loss of business and the important JJ rating that would have affected future business opportunities.Again, using the same communication process model as previously seen, the example of successful communications can be broken down to analyze the different elements. In this case, HAP-LA is the source of the communication as they notify ABC, the receiver, of the problems that would arise during the labor strike. The channels of

Choose A Well Known Leader And By Using The Resources At Www.Leadership Values.Com Analyse Their Qualities Against The 4 E Criteria. Use Evidence To Show How Successfully They Apply To These Criteria

854 words - 3 pages St Germain he won the French championship in the year 1986. In 1994 Arsene became national coach of Holland. It was in 1996 that he became manager.Envision. The first of the four E's is about having a vision for the future, an objective to be achieved in the future. Houllier's vision was to rebuild Liverpool football club in order to make it as successful as it was a decade ago. This would be done through winning trophies and being amongst the