January 1, 1998

Formalism and Contemporary Economics

A Reply to Hausman, Heilbroner, and Mayer
  • Peter J. Boettke

    Director, F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics
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Economic formalism crowds out the analysis of change and adjustments to change under capitalism. They style of analytical narrative that was practiced by the first generation of neoclassical economists, in contrast, is more productive of genuine economic understanding. Despite Daniel Hausman's challenging argument to the contrary, the author maintains that Joseph Stiglitz's work is formalist at its core. While Dr. Boettke agree with Robert Heilbroner's critique of contemporary economics, there is a limited sense in which nonformalist economics can rely on universalistic assumptions. And Thomas Mayer has provided useful guidelines for focusing nonformalist analysis on real-world economic problems.

Read the article at Taylor and Francis Publishers.