Morgenstern's Forgotten Contribution: A Stab to the Heart of Modern Economics

In contrast to physics, there is no estimate of statistical error within economics in spite of Oskar Morgenstern's book On the Accuracy of Economic Observation. The problem of error in economic observations is still a widely neglected problem. The various sources of error that come into play in the social sciences suggest that the error in economic observations is substantial. As the error might be substantial, this paper argues that the usefulness of econometrics becomes questionable.