The Economists' Tool Kit

Key Takeaways

• Economists try to employ the scientific method in their research.
• Scientists cannot prove a hypothesis to be true; they can only fail to prove it false.
• Economists, like other social scientists and scientists, use models to assist them in their analyses.
• Two problems inherent in tests of hypotheses in economics are the all-other-things-unchanged problem and the fallacy of false cause.
• Positive statements are factual and can be tested. Normative statements are value judgments that cannot be tested. Many of the disagreements among economists stem from differences in values.