Google Trends reveals that at the time we were writing our article on ‘The Coming Crisis of Empirical Sociology’ in 2007 almost nobody was searching the internet for ‘Big Data’. It was only towards the very end of 2010 that the term began to register, just ahead of an explosion of interest from 2011 onwards. In this commentary we take the opportunity to reflect back on the claims we made in that original paper in light of more recent discussions about (...) the social scientific implications of the inundation of digital data. Did our paper, with its emphasis on the emergence of, what we termed, ‘social transactional data’ and ‘digital byproduct data’ prefigure contemporary debates that now form the basis and rationale for this excellent new journal? Or was the paper more concerned with broader methodological, theoretical and political debates that have somehow been lost in all of the loud babble that has come to surround Big Data. Using recent work on the BBC Great British Class Survey as an example this brief paper offers a reflexive and critical reflection on what has become – much to the surprise of its authors – one of the most cited papers in the discipline of sociology in the last decade. (shrink)

Although it is often said that economics is too much like physics, to a physicist economics is not at all like physics. The difference is in the scientific methods of the two fields: theoretical economics uses a top down approach in which hypothesis and mathematical rigor come first and empirical confirmation comes second. Physics, in contrast, embraces the bottom up ‘experimental philosophy’ of Newton, in which ‘hypotheses are inferred from phenomena, and afterward rendered general by induction’. Progress would accelerates if (...) economics were to truly make empirical verification the ultimate arbiter of theories, which would force it to open up to alternative approaches. (shrink)

We discuss in this paper the scope of abduction in Economics. The literature on this type of inference shows that it can be interpreted in different ways, according to the role and nature of its outcome. We present a formal model that allows to capture these various meanings in different economic contexts.

Kuhn’s Structure of Scientific Revolutions is one of the most cited books of the twentieth century. Its iconic and controversial nature has obscured its message. What did Kuhn really intend with Structure and what is its real significance? -/- 1 Introduction -/- 2 The Central Ideas of Structure -/- 3 The Philosophical Targets of Structure -/- 4 Interpreting and Misinterpreting Structure -/- 4.1 Naturalism -/- 4.2 World-change -/- 4.3 Incommensurability -/- 4.4 Progress and the nature of revolutionary change -/- 4.5 (...) Relativism, rationality, and realism -/- 4.6 History and sociology of science -/- 4.7 Wittgenstein -/- 5 After Structure. (shrink)

Like other mathematically intensive sciences, economics is becoming increasingly computerized. Despite the extent of the computation, however, there is very little true simulation. Simple computation is a form of theory articulation, whereas true simulation is analogous to an experimental procedure. Successful computation is faithful to an underlying mathematical model, whereas successful simulation directly mimics a process or a system. The computer is seen as a legitimate tool in economics only when traditional analytical solutions cannot be derived, i.e., only as a (...) purely computational aid. We argue that true simulation is seldom practiced because it does not fit the conception of understanding inherent in mainstream economics. According to this conception, understanding is constituted by analytical derivation from a set of fundamental economic axioms. We articulate this conception using the concept of economists' perfect model. Since the deductive links between the assumptions and the consequences are not transparent in ‘bottom‐up’ generative microsimulations, microsimulations cannot correspond to the perfect model and economists do not therefore consider them viable candidates for generating theories that enhance economic understanding. (shrink)

Although the terminology of Big Data has so far gained little traction in economics, the availability of unprecedentedly rich datasets and the need for new approaches – both epistemological and computational – to deal with them is an emerging issue for the discipline. Using interviews conducted with a cross-section of economists, this paper examines perspectives on Big Data across the discipline, the new types of data being used by researchers on economic issues, and the range of responses to this opportunity (...) amongst economists. First, we outline the areas in which it is being used, including the prediction and ‘nowcasting’ of economic trends; mapping and predicting influence in the context of marketing; and acting as a cheaper or more accurate substitute for existing types of data such as censuses or labour market data. We then analyse the broader current and potential contributions of Big Data to economics, such as the ways in which econometric methodology is being used to shed light on questions beyond economics, how Big Data is improving or changing economic models, and the kinds of collaborations arising around Big Data between economists and other disciplines. (shrink)

ABSTRACT Economists not only failed to anticipate the financial crisis; they may have contributed to it—with risk and derivatives models that, through spurious precision and untested theoretical assumptions, encouraged policy makers and market participants to see more stability and risk sharing than was actually present. Moreover, once the crisis occurred, it was met with incomprehension by most economists because of models that, on the one hand, downplay the possibility that economic actors may exhibit highly interactive behavior; and, on the other, (...) assume that any homogeneity will involve economic actors sharing the economist’s own putatively correct model of the economy, so that error can stem only from an exogenous shock. The financial crisis presents both an ethical and an intellectual challenge to economics, and an opportunity to reform its study by grounding it more solidly in reality. (shrink)