Limitations of Economic Methods

It is true that economics uses scientific methods in gathering data, formulating theories or principles, and in making conclusions. However, there are limitations such as the biases and values of those who get the facts, who make the analysis, and who make the conclusion. Biases and values (what is desirable or undesirable) are naturally formed by the political, social, cultural, and economic background of individuals. For instance, a rich man is not in favor of communism. A capitalist may likely have a different idea of income distribution from that of a factory worker.

In addition, the data of economics can not be examined objectively. Economics deals with the study of the behavior of individuals which are not the same because of their different backgrounds. At any rate, there are economic conclusions which can be quantified. But the rest are just generalizations whose accuracies depend on certain conditions or assumptions. It is different in physical or natural sciences such as botany, chemistry, astronomy, or geology. Their materials for investigation and analysis can be placed under a microscope or can be seen through a telescope. Obviously, plants, stars, or rocks have no biases or values. Conclusions are objective and quantifiable. For this reason, such sciences are said to be exact sciences.

However, the shortcomings of economics can be minimized. We only need competent economic researchers who have the integrity of a true scientist. Assumptions should be close to realities. Economic terms should be clearly defined. Without these, people say it is only good in theory but not in practice. That is why many people consider economics a difficult subject.

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Comments 1 comment

HSchneider 3 years ago from Parsippany, New Jersey

Great Hub, Leefrancesemery. Economics is a very helpful and complex discipline but is easily swayed by human bias and error. Increased computing tools and models have improved accuracy and this will continue in the future. One must always study different models from different viewpoints for a more accurate view.

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