Saturday, 27 March 2010: 12:15
One of the problems of the interest area in Economic and Managerial Sciences is the scarce predictability of the models used to describe the subordinate real phenomena. There are lots of examples thereof, not last the big economic crisis hitting the world economy in the last period. We still didn’t recover from it fully, but the worst problem regarding it, was the fact that none, or almost none of the area specialists, was able to predict it. It came like a lightening from the heaven and the politicians of the whole world were caught by surprise and had to try blind solutions.
Tremonti, the Italian finance ministry, a university professor of fiscal law, declared for that reason even, that he is happy not being an economist.
Hence, there is enough reason to try to answer to the following question: what is wrong with the models describing the phenomena in Management and Economics and why they behave so differently from the models in the so-called “hard sciences”?
Examples and cases will be shown in order to explain better the point.
In order to define the situation, we may say that explanations for what happens in Economics and Management exist and are also convincing, but mostly they come ex-post, after things happen, whereas genuine science would ask for ex-ante descriptive models, form which it would be possible to carry out predictions.
In the, so-called, hard scientific areas, such predictions exist: it is mostly normal to be able to predict pretty well what is going to happen in the special study fields.
A case will be developed to show better the situation.
Therefore, the following question is put: is Economic and Managerial knowledge part of the scientific method and do its models behave in a way consonant with it? Given the facts previously listed, that question doesn’t sound idle, and it is worth to be further investigated.
In order to try to answer to this question, the procedure will be the following one: some theoretical points will be listed, by quoting important Epistemology Authors, in order to establish what is scientific and what not, trying to formulate a standard model of the scientific method, in order to find out by comparison, where are the main differences between the use of the scientific method in Economics and Management and the hard sciences, illustrating it on a step-by-step discovery case, which has been extremely important for mankind and was finally explained by the scientific method.
At last, we will try to show, where the main problems of Economics and Management are, trying to find out the main flaws of it. In particular, the defining process of variables and their use in models will be examined, comparing it to the same process in hard sciences and applying it to the situation on the ground. At the end, a conclusion will be drawn, in order to present a result from which an improvement of the situation may be tried.
Tremonti, the Italian finance ministry, a university professor of fiscal law, declared for that reason even, that he is happy not being an economist.
Hence, there is enough reason to try to answer to the following question: what is wrong with the models describing the phenomena in Management and Economics and why they behave so differently from the models in the so-called “hard sciences”?
Examples and cases will be shown in order to explain better the point.
In order to define the situation, we may say that explanations for what happens in Economics and Management exist and are also convincing, but mostly they come ex-post, after things happen, whereas genuine science would ask for ex-ante descriptive models, form which it would be possible to carry out predictions.
In the, so-called, hard scientific areas, such predictions exist: it is mostly normal to be able to predict pretty well what is going to happen in the special study fields.
A case will be developed to show better the situation.
Therefore, the following question is put: is Economic and Managerial knowledge part of the scientific method and do its models behave in a way consonant with it? Given the facts previously listed, that question doesn’t sound idle, and it is worth to be further investigated.
In order to try to answer to this question, the procedure will be the following one: some theoretical points will be listed, by quoting important Epistemology Authors, in order to establish what is scientific and what not, trying to formulate a standard model of the scientific method, in order to find out by comparison, where are the main differences between the use of the scientific method in Economics and Management and the hard sciences, illustrating it on a step-by-step discovery case, which has been extremely important for mankind and was finally explained by the scientific method.
At last, we will try to show, where the main problems of Economics and Management are, trying to find out the main flaws of it. In particular, the defining process of variables and their use in models will be examined, comparing it to the same process in hard sciences and applying it to the situation on the ground. At the end, a conclusion will be drawn, in order to present a result from which an improvement of the situation may be tried.