1991 Articles

Another Century of Economic Science

Stiglitz, Joseph E.

There is a widespread consensus that during the past century, economic science has come of age. It has developed powerful statistical tools to analyse economic data, to make forecasts, and to test alternative hypotheses, and it has employed sophisticated mathematical techniques to articulate its theories and to prove basic theorems characterising the economy. Samuelson (1947) encapsulated the mid-century enthusiasm for the scientific method in his classic Foundations of Economic Analysis, arguing that economics should be based on observable behaviour and testable hypotheses, and, with his theory of revealed preference, showing how this could be done with the theory of consumers' behaviour.