Article,
Causality and Econometrics
Econometrica, 22 (2): 162--177 (1954)
Abstract
Much controversy about causality and related concepts has
arisen in the philosophical literature, and the haze
surrounding the discussion has spread to other fields,
among them econometrics. This brief outline stresses
certain general principles and ideas that are relevant for
actual research activity in the natural and social
sciences. The main points are: (1) The concept of causality
is indispensable and fundamental to all science; (2) The
controversial issues are not latent in the concept of
causality itself, but in certain questionable hypotheses,
so-called "laws of causality," such as the universal
scope of causality, the certainty (irrevocability) of a
cause-effect relationship, the connection of causality with
theories of induction, the principles of determinism and
freedom of the will, etc; (3) A definition of causality
which seems to be adequate from both common-sense and
scientific points of view is suggested with reference to
the well-known situation of the controlled experiment; (4)
Some general remarks on statistical methods from the
viewpoint of the dual distinction between descriptive and
explanatory analysis and between experimental and
nonexperimental observations are made; (5-6) Some comments
are offered on causal relations as a tool in econometrics,
with special regard to the rationale of different types of
economic models.
