Quote of the day: Friedman on hypotheses

By Matt Nolan 19/06/2013

This quote is golden, and since I’ve removed it from my paper at NZAE I have to put it somewhere … lest I lose it from my memory!

Observed facts are necessarily finite in number; possible hypotheses, infinite. If there is one hypothesis that is consistent with the available evidence, there are always an infinite number that are.
It is from “The Methodology of Positive Economics” by Milton Friedman.

The lesson that we use ceteris paribus assumptions to narrow down potential hypotheses, as well as to simplify and clarify links, was an important lesson to learn as a student.  And made “what economists do” with each paper they contribute (testing the CP assumptions, attempting to change the set of CP assumptions) make a lot more sense to me.