But Economics Is Not an Experimental Science
The fact is, economics is not an experimental science and cannot be. "Natural" experiments and "quasi" experiments are not in fact experiments. They are rhetorical devices that are often invoked to avoid having to confront real econometric difficulties. Natural, quasi-, and computational experiments, as well as regression discontinuity design, can all, when well applied, be useful, but none are panaceas. The essay by Angrist and Pischke, in its enthusiasm for some real accomplishments in certain subfields of economics, makes overbroad claims for its favored methodologies. What the essay says about macroeconomics is mainly nonsense. Consequently, I devote the central part of my comment to describing the main developments that have helped take some of the con out of macroeconomics. Recent enthusiasm for single-equation, linear, instrumental variables approaches in applied microeconomics has led many in these fields to avoid undertaking research that would require them to think formally and carefully about the central issues of nonexperimental inference -- what I see and many see as the core of econometrics. Providing empirically grounded policy advice necessarily involves confronting these difficult central issues.
Volume (Year): 24 (2010)
Issue (Month): 2 (Spring)
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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NBER Working Papers
0430, National Bureau of Economic Research, Inc.
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- Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1.
- Finn E. Kydland & Edward C. Prescott, 1994.
"The computational experiment: an econometric tool,"
178, Federal Reserve Bank of Minneapolis.
- Leeper, Eric M., 1997. "Narrative and VAR approaches to monetary policy: Common identification problems," Journal of Monetary Economics, Elsevier, vol. 40(3), pages 641-657, December.
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- Mehra, Yash P, 1978. "Is Money Exogenous in Money-Demand Equations," Journal of Political Economy, University of Chicago Press, vol. 86(2), pages 211-28, April.
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