Originally posted by crikey63
When nobel prize winning economist Milton Friedman stated that assumptions weren't important , it was predictions that mattered , it doesn't seem that scientific, have I missed something .
It strongly depends on the context in which he said it. If one makes some assumptions and the resultant model produces realistic results then the assumptions gain post hoc
justification. If on the other hand he could just have been attempting to deflect valid criticism of his theory, in a fallacious fashion - I find it difficult to believe he produced a model which made particularly precise or testable predictions.
There are economic models which make outrageous assumptions and you can change the qualitative
behaviour of a model by relaxing some assumption - such as agents having perfect information . Since the predictions of a model depend on the assumptions in it, and if they don't the assumptions may as well not have been made, I do not agree with his statement.