Economic theory, whether we like it or not, affects the way individuals, businesses, local and state governments, and nations behave. Improvement in economic knowledge will help to ameliorate human welfare and help to control and reliably predict the economic consequences of economic, political and social changes. Given the increasing importance of economics, it becomes increasingly necessary as well that we should more closely examine the philosophical foundations of economics, that is, such issues as testability, progress, unrealistic assumptions, ideal models and the nature of rationality. In 1976, Dr. Rosenberg published what has been called a "watershed" study of these issues. In the ensuing 10 years, Dr. Rosenberg has immersed himself in these issues and has in fact led the criticism of several of the views originally defended in that study. Under this grant, Dr. Rosenberg will further study the ballooning literature in the philosophical foundations of economics and developments in economic theory itself in order to synthesize his own work and to assess and incorporate the important contributions of others to this subject. The resulting study on the nature of economic theory will examine alternate approaches to the philosophy of economics, especially the rhetorical approach, examine what the nature of progress is in economics, the function of economic theory, the meaning and uses of the explanatory variables "expectation" and "preference," economic theory as applied mathematics, neoclassical "dissidents" and their assumptions, and adaptationalism in economics. These studies promise to be most provocative and of great interest to economics and philosophy of science alike.
