Over as a problem of induction. 2. As it

Over thousands of years, there
was an ongoing debate among scientists and philisophers of science from
different speheres about the fundamentals of scientific method. The received
view of science comes from the famous logical positivists movement whose main
aim was to distinguish between science and pseudo-science. Logical positivisits
rely on the idea of empiricism, namely, the idea that knowledge arises from
experience. Empiricism implies that syntethic statements must be meaningful.     


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Yet, there are problems which arise
out of this thinking. David Hume argued there is always a chance that a future
observation might not correspond to its past generalization. This is known as a
problem of induction.



            As it has
been mentioned above, laws establishment are crucial for expalanation and
prediction of knowledge from the logical positivists perspective. In some
instances, particularly economics, these laws have to be established outside
the labaratory experiment. However, it is difficult to run such an experiment
or study that would fully analyse causal relations between economic variables.

It arises from the difficulty of filfilling the ceteris paribus condition
outside the labaratory because it is impossible to isolate the economic phenomenon
from other economic effects.


Trygve Haalemo made an important
endowment into econometrics development. In his paper, Haavelmo discussed the
problem of uncovering laws outside the laboratory setting. In order to evaluate
the degree of consistency of a relationship between economic variable over
time, Haavelmo made a distinction between the prospective and factual factors,
which influence a specific economic variable. This distinction is crucial due
to the impossibility of the ceteris paribus condition. However, observing only
passive variables leads to another problem, which states that it can only be
observed whether a factor has actual influence, whule there are indefinite
amoun of other factors which potentially affect the economic variable, but
these effects are not observed.