The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Causality in Economics and Econometrics

  • Kevin D. Hoover
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2227

Abstract

Economics was conceived as early as the classical period as a science of causes. The philosopher–economists David Hume and J. S. Mill developed the conceptions of causality that remain implicit in economics today. This article traces the history of causality in economics and econometrics, showing that different approaches can be classified on two dimensions: process versus structural approaches, and a priori versus inferential approaches. The variety of modern approaches to causal inference is explained and related to this classification. Causality is also examined in relationship to exogeneity and identification.

Keywords

Aristotle Causal inference Causality in economics and econometrics Correlation Cowles Commission Econometrics Edgeworth, F. Y. Endogeneity and exogeneity Granger–Sims causality Graph theory Hume, D. Identification Index numbers Induction Instrumental variables Jevons, W. S. Microfoundations Mill, J. S. Mises, L. von Natural experiments Observational equivalence Process analysis Quetelet, A. Rational expectations Regression Robbins, L. C. Simon, H. Smith, A. Statistical inference Structural vector autoregressions Tinbergen, J. Vector autoregressions Wold, H. O. A 

JEL Classifications

B4 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Kevin D. Hoover
    • 1
  1. 1.