Symposium on Marshall's Tendencies: 5 Sutton's Critique of Econometrics
Abstract
Through most of the history of economics, the most influential commentators on methodology
were also eminent practitioners of economics. And even not so long ago, it was so.
Milton Friedman, Paul Samuelson, Trygve Haavelmo, and Tjalling Koopmans were awarded
Nobel prizes for their substantive contributions to economics, and were each important
contributors to methodological thought. But the fashion has changed. Specialization
has increased. Not only has methodology become its own field, but many practitioners
have come to agree with Frank Hahn's (1992) view that methodology is a distraction
to the practitioner, best left to the professional methodologists and philosophers,
and of little practical import even when delivered from their pens. John Sutton's
lectures, Marshall's Tendencies: What Economists Can Know, is a welcome return to
the older fashion, for Sutton is an eminent practitioner of game theory and industrial
organization. One of the main themes of these rich and nuanced lectures ± and the
one on which I shall focus ± is the relationship of economic theory to econometric
evidence. Sutton's reflections on econometrics appear to arise from the darker recesses
of his practitioner's soul. While he affects a sunny disposition and ends on a hopeful
note, his analysis articulates the lurking fear that econometrics is a hopeless project
and that economics has little to learn from the interaction of theory and econometrics.
Sutton's book is like a play in which virtue triumphs, but the villain gets all the
good lines.
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Kevin Douglas Hoover
Professor of Economics
Professor Hoover's research interests include macroeconomics, monetary economics,
the history of economics, and the philosophy and methodology of empirical economics.
His recent work in economics has focused on the application of causal search methodologies
for structural vector autoregression, the history of microfoundational programs in
macroeconomics, and Roy Harrod's early work on dynamic macroeconomics. In philosophy,
he has concentrated on issues related to causality, especially in economi

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