ABSTRACT
This chapter suggests that the emergence of economics as a deductively-based discipline. Theory, history, and statistical method must become equally important foundations for the teaching and practice of economics. A stark contrast is provided by a comparison of the economics profession at the time of its emergence as a ‘modern’ social science, in the late seventeenth and early eighteenth centuries, with its position in the late twentieth century. The economics profession consists of three main subgroups: the theorist, the applied economist and the economic historian. As economists became more involved in advising decision-makers in government and business, they became closely identified with the rise and fall of economic prosperity. In the 1930s the mathematical theory and statistical model building in econometrics relied more closely upon reality. The resulting dynamic disequilibrium models attempted to explain causal sequences and to show the impact of policy on these processes.
