ABSTRACT
WHY DISTINGUISH THREE BRANCHES OF ECONOMICS? There are a number of reasons for distinguishing among three branches of economics rather than between two. The most important reason is that different methodological rules apply to each. In building up a theory, or general law, about how the economy works, the task is to generalize from specifics - to abstract from the specifics of one's knowledge and develop models that elegantly capture relationships that transcend any specific instance. In the pursuit of general rules, Friedman's F-twist is relevant. The more elegant the theory, the more removed from real-world assumptions the theory is.
