“The usefulness of observation and measurement in testing economic theories arises because the theorems of economics are supposed to relate to the actual world… Any economic theorem rigorously deduced from given postulates may be regarded as a hypothesis about the actual world which xperience may show to be false.”

— Richard Stone

Source: The Role of Measurement in Economics. 1951, p. 12

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Richard Stone 11

British economist, Nobel Memorial Prize winner 1913–1991

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“Econometrics may be defined as the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference.”

Tjalling Koopmans (1910–1985) Dutch American economist

Paul Samuelson, Tjalling Koopmans, and Richard Stone. "Report of the evaluative committee for Econometrica." Econometrica- journal of the Econometric Society. (1954): 141-146.

“Econometrics may be defined as the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference.”

Richard Stone (1913–1991) British economist, Nobel Memorial Prize winner

Paul Samuelson, Tjalling Koopmans, and Richard Stone. "Report of the evaluative committee for Econometrica." Econometrica- journal of the Econometric Society. (1954): 141-146.

“Econometrics may be defined as the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference.”

Paul A. Samuelson (1915–2009) American economist

Paul Samuelson, Tjalling Koopmans, and Richard Stone. "Report of the evaluative committee for Econometrica." Econometrica- journal of the Econometric Society. (1954): 141-146.
1950s–1970s

“All the measurements in the world do not balance one theorem by which the science of eternal truths is actually advanced.”

Carl Friedrich Gauss (1777–1855) German mathematician and physical scientist

March 14, 1824. As quoted in Carl Friedrich Gauss: Titan of Science (1955) by Guy Waldo Dunnington. p. 360

“The idea that theorems follow from the postulates does not correspond to simple observation.”

Richard Hamming (1915–1998) American mathematician and information theorist

The Unreasonable Effectiveness of Mathematics (1980)
Context: The idea that theorems follow from the postulates does not correspond to simple observation. If the Pythagorean theorem were found to not follow from the postulates, we would again search for a way to alter the postulates until it was true. Euclid's postulates came from the Pythagorean theorem, not the other way around.

“There are numerous theorems in economics that rely upon mathematically fallacious propositions.”

Steve Keen (1953) Australian economist

Source: Debunking Economics - The Naked Emperor Of The Social Sciences (2001), Chapter 12, Don't Shoot Me, I'm Only The Piano, p. 259

“Economics is a young science, and there is still much to be learned. Economists sometimes disagree because they have different hunches about the validity of alternative theories or about the size of important parameters that measure how economic variables are related.”

N. Gregory Mankiw (1958) American economist

Source: Principles of Economics (1998-), Ch. 2. Thinking Like an Economist; p. 30

“There [is]… a list of five tests which any body of doctrine which aspires to the name of economic theory must be able to meet:
1. Economic theory should unify economic science. - The task of a general body of theory in any subject is to give unity to its investigations…
2. Economic theory should be relevant to the modern problem of control. - Students of economics should spend their efforts upon subjects worth investigation…
3. The proper subject-matter of economic theory is institutions. - The demand that economic theory relate to institutions is implicit in the plea for its relevancy…
4. Economic theory is concerned with matters of process. - If economic theory is to treat of institutions it must know both the kinds of things institutions are and the kinds of things they are not…
5. Economic theory must be based upon an acceptable theory of human behavior.”

Walton Hale Hamilton (1881–1958) Yale Law Professor

After all control and institutions and processes are immediate things. They can all be translated into terms of human conduct...
Source: The Institutional Approach to Economic Theory, 1919, p. 311-6

“The general theory of economic equilibrium was strengthened and made effective as an organon of thought by two powerful subsidiary conceptions — the Margin and Substitution. The notion of the Margin was extended beyond [Utility]] to describe the equilibrium point in given conditions of any economic factor which can be regarded as capable of small variations about a given value, or in its functional relation to a given value.”

John Maynard Keynes (1883–1946) British economist

Source: Essays In Biography (1933), Alfred Marshall, p. 223

“I have tried to make clear in this brief sketch of the nature of deductively formulated theories, at least as they occur in economics, that, although their origin lies in common observation and introspection, nevertheless they are capable of a purely mathematical development through the exact statement of a of a set of postulates which, however, since they must inevitably contain assumptions about human behaviour, require to be tested by reference to actual events.”

Richard Stone (1913–1991) British economist, Nobel Memorial Prize winner

Source: The Role of Measurement in Economics. 1951, p. 14-15

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