Modelers trained in the Friedman tradition ignored unrealistic assumptions and tested only implications.

Evidence

The fact that Sharpe was in this respect “very much in the Friedman camp at the time” meant that he did not allow making unrealistic assumptions to disturb him as he practiced what Alchian had taught in respect to modeling. As he puts it, his approach was to “take the problem, try to distil out the two or three most important things, build a logically coherent model … that has those ingredients in it and then see whether or not this can help you understand some real phenomenon” (Sharpe interview). — Donald MacKenzie, An Engine, Not a Camera, 245

Categorization

• XREF: connects to: Friedman judged hypotheses solely by predictive capacity, not by realism of assumptions — Angus Burgin, The Great Persuasion: Reinventing Free…, 405; Friedman armed finance theorists against ‘unrealistic’ critiques of their models. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 62; Friedman held that important theories must rest on descriptively false assumptions — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 54

Broader Connections

• Friedman held that important theories must rest on descriptively false assumptions #expands (0.92) — Donald MacKenzie, An Engine, Not a Camera, 54
• Friedman armed finance theorists against ‘unrealistic’ critiques of their models. #expands (0.85) — Donald MacKenzie, An Engine, Not a Camera, 62