Empirical evidence validates theories from "summary" of EBOOK: Macroeconomics by Rudiger Dornbusch,Stanley Fischer,Richard Startz
The relationship between empirical evidence and theories is crucial in the field of macroeconomics. Theories are developed based on certain assumptions and logic, but they need to be tested against real-world data to determine their validity. This is where empirical evidence comes into play - it serves as a means of either confirming or refuting economic theories. When empirical evidence aligns with a theory, it provides support for the validity of that theory. For example, if a theory predicts a certain relationship between variables, and empirical data shows that this relationship holds true in the real world, it strengthens the credibility of the theory. This is because the theory has been tested against actual data and has been found to accur...
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