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Local Projections for Applied Economics

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  • Òscar Jordà

Abstract

The dynamic causal effect of an intervention on an outcome is of paramount interest to applied macro- and micro-economics research. However, this question has been generally approached differently by the two literatures. In making the transition from traditional time series methods to applied microeconometrics, local projections can serve as a natural bridge. Local projections can translate the familiar language of vector autoregressions (VARs) and impulse responses into the language of potential outcomes and treatment effects. There are gains to be made by both literatures from greater integration of well established methods in each. This review shows how to make these connections and points to potential areas of further research.

Suggested Citation

  • Òscar Jordà, 2023. "Local Projections for Applied Economics," Working Paper Series 2023-16, Federal Reserve Bank of San Francisco.
    • Handle: RePEc:fip:fedfwp:96482
    DOI: 10.24148/wp2023-16
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    References listed on IDEAS

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    6. Matzner, Anna & Steininger, Lea, 2024. "Firms’ heterogeneous (and unintended) investment response to carbon price increases," Working Paper Series 2958, European Central Bank.
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    10. Santiago Camara & Jeanne Aublin, 2025. "In-between Transatlantic (Monetary) Disturbances," Papers 2509.13578, arXiv.org.
    11. Oscar Jaulin & Andrey Ramos, 2025. "Becoming Green: Decomposing the Macroeconomic Effects of Green Technology News Shocks," Papers 2507.18386, arXiv.org.
    12. Steininger, Lea & Matzner, Anna, 2025. "Monetary policy and the firm-level labor share: a story about capital," Working Paper Series 3024, European Central Bank.
    13. Juan R. Hernández & Mateo Hoyos & Daniel Ventosa-Santaulària, 2024. "Monetary Policy in Emerging Markets under Global Uncertainty," Working Papers DTE 634, CIDE, División de Economía.
    14. Allayioti, Anastasia & Gόrnicka, Lucyna & Holton, Sarah & Martínez Hernández, Catalina, 2024. "Monetary policy pass-through to consumer prices: evidence from granular price data," Working Paper Series 3003, European Central Bank.
    15. Arisa Chantaraboontha, 2025. "Measuring the Spillovers of US Unconventional Surprises across Monetary Conditions with Local Projections," ISER Discussion Paper 1276, Institute of Social and Economic Research, The University of Osaka.

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