The in-principle inconclusiveness of causal evidence in macroeconomics

  title={The in-principle inconclusiveness of causal evidence in macroeconomics},
  author={Tobias Henschen},
  journal={European Journal for Philosophy of Science},
  • Tobias Henschen
  • Published 28 June 2018
  • Economics
  • European Journal for Philosophy of Science
The paper analyzes the methods that macroeconomists can use to provide evidence in support of causal hypotheses: the instrumental variable (IV) method and econometric causality tests. It argues that the evidence that macroeconomists provide when using these methods is in principle too inconclusive to support the hypothesis that X directly type-level causes Y, where X and Y stand for macroeconomic aggregates like the real interest rate and aggregate demand. The evidence provided by the IV method… 

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