Causality in Macroeconomics examines causality while taking macroeconomics seriously. A pragmatic and realistic philosophy is joined to a macroeconomic foundation that refines Herbert Simon's well-known work on causal order to make a case for a structural approach to causality. The structural approach is used to understand modern rational expectations models, regime switching models, Granger causality, vector autoregressions, the Lucas critique, and concept exogeneity. Techniques of causal inference based on patterns of stability and instability in the face of identified regime changes (...) are developed and illustrated in two empirical case studies. (shrink)

Through most of the history of economics, the most influential commentators on methodology were also eminent practitioners of economics. And even not so long ago, it was so. Milton Friedman, Paul Samuelson, Trygve Haavelmo, and Tjalling Koopmans were awarded Nobel prizes for their substantive contributions to economics, and were each important contributors to methodological thought. But the fashion has changed. Specialization has increased. Not only has methodology become its own field, but many practitioners have come to agree with Frank Hahn's (...) (1992) view that methodology is a distraction to the practitioner, best left to the professional methodologists and philosophers, and of little practical import even when delivered from their pens. John Sutton's lectures, Marshall's Tendencies: What Economists Can Know, is a welcome return to the older fashion, for Sutton is an eminent practitioner of game theory and industrial organization. One of the main themes of these rich and nuanced lectures is the relationship of economic theory to econometric evidence. Sutton's reflections on econometrics appear to arise from the darker recesses of his practitioner's soul. While he affects a sunny disposition and ends on a hopeful note, his analysis articulates the lurking fear that econometrics is a hopeless project and that economics has little to learn from the interaction of theory and econometrics. Sutton's book is like a play in which virtue triumphs, but the villain gets all the good lines. (shrink)

Discontented people might talk of corruption in the Commons, closeness in the Commons and the necessity of reforming the Commons, said Mr. Spenlow solemnly, in conclusion; but when the price of wheat per bushel had been the highest, the Commons had been the busiest; and a man might lay his hand upon his heart, and say this to the whole world, – ‘Touch the Commons, and down comes the country!’.

Although the relevance and importance of his work has been recognized only belatedly, Charles Sanders Peirce was, throughout his life, a careful student and significant contributor to the development of logic, scientific theory, and philosophy generally. Occasionally, complete appreciation of Peirce's efforts has been hampered because his work is often unique and, at times, highly idiosyncratic. Yet, we hope to show in this paper that for one aspect of his work in logic Peirce did not abandon the ordinary without purpose. (...) Only relatively recently have philosophers of science become interested in the logic of discovery - that is, in the logic of the selection of hypotheses to be tested rather than simply in the ways of testing hypotheses which have already been selected. (shrink)

Elliot Sober ([2001]) forcefully restates his well-known counterexample to Reichenbach's principle of the common cause: bread prices in Britain and sea levels in Venice both rise over time and are, therefore, correlated; yet they are ex hypothesi not causally connected, which violates the principle of the common cause. The counterexample employs nonstationary data—i.e., data with time-dependent population moments. Common measures of statistical association do not generally reflect probabilistic dependence among nonstationary data. I demonstrate the inadequacy of the counterexample and of (...) some previous responses to it, as well as illustrating more appropriate measures of probabilistic dependence in the nonstationary case. A challenge to the principle of the common causeSober's argument and the attempts to rescue the principleProbabilistic dependenceNonstationary time seriesProbabilistic dependence in nonstationary time seriesDo Venetian sea levels and British bread prices violate the principle of the common cause? (shrink)

Argues that ontological reduction of macroeconomics to microeconomics is untenable. Existence of macroeconomic aggregates; Microfoundations of macroeconomics; Examinations of the general price level; Limits of the scientific development of microeconomics.

The Methodology of Empirical Macroeconomics stakes out a pragmatic middle-ground between traditional, prescriptive economic methodology and recent descriptive methodology. The former is sometimes seen as arrogantly telling economists how to do their work and the latter as irrelevant to their practice. The lectures are built around a case study of a concrete example of macroeconomic analysis. They demonstrate that economic methodology and the philosophy of science offer insights that help to resolve the genuine concerns of macroeconomists. Some examples of questions (...) addressed include: What is the relationship between theoretical models and empirical observations? What is the relevance of macroeconomics to policy? Should macroeconomics be viewed as a special case of microeconomics? What is the place of long-standing philosophical issues in macroeconomics, such as the scope and nature of economic laws, the role of idealizations, methodological individualism, and the problem of causality? (shrink)

Economics prefers complete explanations: general over partial equilibrium, microfoundational over aggregate. Similarly, probabilistic accounts of causation frequently prefer greater detail to less as in typical resolutions of Simpson’s paradox. Strategies of causal refinement equally aim to distinguish direct from indirect causes. Yet, there are countervailing practices in economics. Representative-agent models aim to capture economic motivation but not to reduce the level of aggregation. Small structural vector-autoregression and dynamic stochastic general-equilibrium models are practically preferred to larger ones. The distinction between exogenous (...) and endogenous variables suggests partitioning the world into distinct subsystems. The tension in these practices is addressed within a structural account of causation inspired by the work of Herbert Simon’s, which defines cause with reference to complete systems adapted to deal with incomplete systems and piecemeal evidence. The focus is on understanding the constraints that a structural account of causation places on the freedom to model complex or lower-order systems as simpler or higher-order systems and on to what degree piecemeal evidence can be incorporated into a structural account. (shrink)

Although the relevance and importance of his work has been recognized only belatedly, Charles Sanders Peirce was, throughout his life, a careful student and significant contributor to the development of logic, scientific theory, and philosophy generally. Occasionally, complete appreciation of Peirce's efforts has been hampered because his work is often unique and, at times, highly idiosyncratic. Yet, we hope to show in this paper that for one aspect of his work in logic Peirce did not abandon the ordinary without purpose. (...) Only relatively recently have philosophers of science become interested in the logic of discovery - that is, in the logic of the selection of hypotheses to be tested rather than simply in the ways of testing hypotheses which have already been selected. (shrink)

Macroeconomists overwhelmingly believe that macroeconomics requires microfoundations, typically understood as a strong eliminativist reductionism. Microfoundations aims to recover intentionality. In the face of technical and data constraints macroeconomists typically employ a representative-agent model, in which a single agent solves the microeconomic optimization problem for the whole economy, and take it to be microfoundationally adequate. The characteristic argument for the representative-agent model holds that the possibility of the sequential elaboration of the model to cover any number of individual agents justifies treating (...) the policy conclusions of the single-agent model as practically relevant. This eschatological justification is examined and rejected. (shrink)

Three experiments explored the effects of word problem cueing on debiasing versions of the bat-and-ball problem. In the experimental condition order, participants solved a simpler isomorphic version of the problem prior to solving a standard version that, critically, had the same item-and-dollar amounts. Conversely, in the control condition order, participants solved the standard version prior to solving the isomorph. Across the first 2 experiments, participants cued with the isomorph were more likely to correctly solve the standard version of the problem. (...) In the third experiment, this cueing effect was not replicated, but importantly cued participants were more likely to correctly solve the standard version of the problem with other item-and-dollar amounts, indicating near transfer. Far transfer was evident in faster response times to other problems in the Cognitive Reflection Test following practice. Along with providing converging evidence for the cueing account, these results are consistent with recent attentional debiasing findings. (shrink)

Recent debates over the nature of causation, casual inference, and the uses of causal models in counterfactual analysis, involving inter alia Nancy Cartwright (Hunting Causes and Using Them), James Woodward (Making Things Happen), and Judea Pearl (Causation), hinge on how causality is represented in models. Economists’ indigenous approach to causal representation goes back to the work of Herbert Simon with the Cowles Commission in the early 1950s. The paper explicates a scheme for the representation of causal structure, inspired by Simon, (...) and shows how this representation sheds light on some important debates in the philosophy of causation. This structural account is compared to Woodward’s manipulability account. It is used to evaluate the recent debates – particularly, with respect to the nature of causal structure, the identity of causes, causal independence, and modularity. Special attention is given to modeling issues that arise in empirical economics. (shrink)

The difficulty of conducting relevant experiments has long been regarded as the central challenge to learning about the economy from data. The standard solution, going back to Haavelmo's famous “The Probability Approach in Econometrics” (1944), involved two elements: first, it placed substantial weight on a priori theory as a source of structural information, reducing econometric estimates to measurements of causally articulated systems; second, it emphasized the need for an appropriate statistical model of the data. These elements are usually seen as (...) tightly linked. I argue that they are, to a large extent, separable. Careful attention to the role of an empirically justified statistical model in underwriting probability explains puzzles not only in economics, but more generally with respect to recent criticisms of Reichenbach's principle of the common cause, which lies behind graph-theoretic causal search algorithms. And it provides an antidote to the pessimistic understanding of the possibilities for passive observation of causal structure in econometrics and related areas of Nancy Cartwright and others. (shrink)

(2013). Beyond mechanical markets – asset price swings, risk and the role of the state. Journal of Economic Methodology: Vol. 20, Methodology, Systemic Risk, and the Economics Profession, pp. 69-75. doi: 10.1080/1350178X.2013.774856.

In the eyes of its practitioners, economics is both a deductive science and an empirical science. The starting point of its deductions might be thought of as first principles. But what is the status of such principles? The tension between foundationalism, the idea that there are necessary and secure first principles for economic inquiry, and fallibilism, the idea that no belief can be certified as true beyond the possibility of doubt, is explored. Empirical disciplines require some sort of falsifiability. Yet, (...) empirical inquiries also require a starting place—if not a necessarily true one, at least an indubitable one, that is, one that is not actually doubted. Indubitability appears to have necessary consequences, undercutting fallibilism, while fallibilism threatens confidence in the de facto first principles that begin inquiry. This tension is examined in three well-known attempts to define economics and its method: John Stuart Mill’s economics as the science of wealth, Lionel Robbins’s economics as constrained optimization; and George Stigler and Becker’s attempt to reformulate neoclassical economics to square empiricism with Robbins’ deductivism. (shrink)

Modern empirical macroeconomic models, known as structural autoregressions (SVARs) are dynamic models that typically claim to represent a causal order among contemporaneously valued variables and to merely represent non-structural (reduced-form) co-occurence between lagged variables and contemporaneous variables. The strategy is held to meet the minimal requirements for identifying the residual errors in particular equations in the model with independent, though otherwise not directly observable, exogenous causes (“shocks”) that ultimately account for change in the model. In nonstationary models, such shocks accumulate (...) so that variables have discernible trends. Econometricians have conceived of variables that trend in sympathy with each other (so-called “cointegrated variables”) as sharing one or more of these unobserved trends as a common cause. It is possible for estimates of the values of both the otherwise unobservable individual shocks and the otherwise unobservable common trends to be backed-out of cointegrated systems of equations. The issue addressed in this paper is whether and in what circumstances these values can be regarded as observations of real entities rather than merely artifacts of the representation of variables in the model. The issue is related, on the one hand, to practical methodological problems in the use of SVARs for policy analysis—e.g., does it make sense to estimate of shocks or trends in one model and then use them as measures of variables in a conceptually distinct model? The issue is also related to debates in the philosophical analysis of causation—particularly, whether we are entitled, as assumed by the developers of Bayes-net approaches, to rely on the causal Markov condition (a generalization of Reichenbach’s common-cause condition) or whether cointegration generates a practical example of Nancy Cartwright’s “byproducts” objection to the causal Markov condition. (shrink)

The dominant view among macroeconomists is that macroeconomics reduces to microeconomics, both in the sense that all macroeconomic phenomena arise out of microeconomic phenomena and in the sense that macroeconomic theory—to the extent that it is correct—can be derived from microeconomic theory. More than that, the dominant view believes that macroeconomics should in practice use the reduced microeconomic theory: this is the program of microfoundations for macroeconomics to which the vast majority of macroeconomists adhere. The "microfoundational" models that they actually (...) employ are, however, characterized by another feature: they are highly idealized, even when they are applied as direct characterizations of actual data, which itself consists of macroeconomic aggregates. This paper explores the interrelationship between reductionism and idealization in the microfoundational program and the role of idealization in empirical modeling. (shrink)

Critics argued that the 2007–09 financial crisis was failure of macroeconomics, locating its source in the dynamic, stochastic general-equilibrium model and calling for fundamental re-orientation of the field. Critics exaggerated the role of DSGE models in actual policymaking, and DSGE modelers addressed some criticisms within the DSGE framework. But DSGE modelers oversold their success and even claimed that their approach is the sine qua non of competent macroeconomics. The DSGE modelers and their critics renew an old debate over the relative (...) priority of a priori theory and empirical data, classically exemplified in the Measurement without Theory Debate of the 1940s between the Cowles Commission and the National Bureau of Economic Research. The earlier debate is reviewed for its implications for the recent controversy. In adopting the Cowles-Commission position, some DSGE modelers would essentially straight-jacket macroeconomics and undermine economic science and the pursuit of knowledge in an open-minded, yet critical framework. (shrink)

This paper addresses the role of specification tests in the selection of a statistically admissible model used to evaluate economic hypotheses. The issue is formulated in the context of recent philosophical accounts on the nature of models and related to some results in the literature on specification search. In contrast to enumerative induction and a priori theory, powerful search methodologies are often adequate substitutes for experimental methods. They underwrite and support, rather than distort, statistical hypothesis tests. Their success is grounded (...) in a systematic effort to mold appropriate models to, and test them against, constraints of the data. (shrink)

Kur’ân’da mescid kavramı daha çok Mescid-i Haram bağlamında gündeme gelmekte ve yeryüzünde kurulan ilk evin/maʿbedin Ka’be olduğu ifade edilmektedir. Mescidler, Mescid-i Haram gibi güven, huzur, istikrar veren özgün yapılardır. Mescidler; terbiye, eğitim, irşâd, tefekkür, birlik ve beraberlik, dayanışma, yardımlaşma vurguları ile toplumun sosyal açıdan gelişmesini sağlar. İslâm tarihinde camilerin ifa ettiği vazifeler, İslâm dininin diğer muharref dinler gibi dinle dünya işlerinin arasını ayırmadığını, dini kalbe hapsetmediğini göstermektedir. Hz. Peygamber ve sahabeler döneminde mescidler çok amaçlı mekânlar olarak kullanılmaktaydı. Mescidlerin Hz. (...) Peygamber dönemindeki fonksiyonelliğini kaybetmesi toplum üzerindeki etkinliğini zayıflatmıştır. Mescidler günümüzde sosyal etkinliklerle canlı duruma getirilmeli ve öyle ki mescidler/camiler hayat olmalıdır. Makalemizde mescid kavramın Kur’ân ve hadislerdeki yeri, önemi, işlevi incelenecek ve mescidlerin tarihsel serüveni ve fonksiyonları hakkında bilgi verilecektir. Çalışmamız, ülkemizde camilerin asli fonksiyonlarına dönmesi ve toplumsal alanda etkinliğinin arttırılması hedeflemektedir. Bunun için yapılması gereken bazı iyileştirme faaliyetleri üzerinde durulacak ve çözüm önerileri sunulacaktır. (shrink)

Introduction. Bert HAMMINGA and Neil DE MARCHI: Préface. Bert HAMMINGA and Neil DE MARCHI: Idealization and the Defence of Economics: Notes Toward a History. Part I: General Observations on Idealization in Economics. Kevin D. HOOVER: Six Queries about Idealization in an Empirical Context. Bernard WALLISER: Three Generalization Processes for Economic Models. Steven COOK and David HENDRY: The Theory of Reduction in Econometrics. Maarten C.W. JANSSEN: Economic Models and Their Applications. Adolfo GARCÍA DE LA SIENRA: Idealization and Empirical Adequacy in (...) Economic Theory. Izabella NOWAKOWA and Leszek NOWAK: On Correspondence between Economic Theories. Uskali MÄKI: Isolation, Idealization and Truth in Economics. Part II: Case Studies of Idealization in Economics. Nancy CARTWRIGHT: Mill and Menger: Ideal Elements and Stable Tendencies. Wolfgang BALZER: Exchange Versus Influence: A Case of Idealization. Kees COOLS, Bert HAMMINGA, Theo A.F. KUIPERS: Truth Approximation by Concretization in Capital Structure Theory. Daniel M. HAUSMAN: Paul Samuelson as Dr. Frankenstein: When an Idealization Runs Amuck. Hugo A. KEUZENKAMP: What if an Idealization is Problematic? The Case of the Homogeneity Condition in Consumer Demand. Werner DIEDERICH: Nowak on Explanation and Idealization in Marx's 'Capital'. Gérard JORLAND: Idealization and Transformation. Jack BIRNER: Idealizations and Theory Development in Economics. Some History and Logic of the Logic Discovery. Discussions. Leszek NOWAK: The Idealizational Methodology and Economics. Replies to Diederich, Hoover, Janssen, Jorland and Mäki. (shrink)

In this important study D. M. Armstrong offers a comprehensive system of analytical metaphysics that synthesises but also develops his thinking over the last twenty years. Armstrong's analysis, which acknowledges the 'logical atomism' of Russell and Wittgenstein, makes facts the fundamental constituents of the world, examining properties, relations, numbers, classes, possibility and necessity, dispositions, causes and laws. All these, it is argued, find their place and can be understood inside a scheme of states of affairs. This is a comprehensive and (...) rigorously this-worldly account of the most general features of reality, argued from a distinctive philosophical perspective, and it will appeal to a wide readership in analytical philosophy. (shrink)

Le Yaoundé PhD Seminar-Theories of Justice est un séminaire international et pluridisciplinaire qui se tient depuis 2012 à Yaoundé. Il réunit des professeurs et des doctorants africains et non africains ainsi que des professionnels et des représentants de la société civile autour de questions de justice sociale et de politique publique. À l'initiative de doctorants africains et non africains, il a été mis en place conjointement par la Chaire Hoover de l'Université catholique de Louvain et par le Centre d’études (...) et de recherches sur la justice sociale et politique de l’Université catholique d’Afrique centrale dans le but de bâtir une véritable solidarité entre le Nord et le Sud dans le domaine de la formation académique et de la recherche. The Yaoundé PhD Seminar-Theories of Justice is an international and multidisciplinary seminar which is held since 2012 in Yaoundé. It brings together teachers and African and non-African doctoral students as well as professionals and representatives of civil society around issues of social justice and public policy. At the initiative of African and non-African students, it has been implemented jointly by the Hoover Chair of the Catholic University of Louvain and the Centre of studies and research on social justice and political of the Catholic University of Central Africa in order to build a genuine solidarity between the North and the South in the field of academic training and research. (shrink)

Everything we do relies on causation. We eat and drink because this causes us to stay alive. Courts tell us who causes crimes, criminology tell us what causes people to commit them. D.H. Mellor shows us that to understand the world and our lives we must understand causation. _The Facts of Causation_, now available in paperback, is essential reading for students and for anyone interested in reading one of the ground-breaking theories in metaphysics. We cannot understand the world and our (...) place in it without understanding causation. Yet a complete account of the nature and implications of causation does not exist. D.H Mellor's new book is that account. (shrink)

_Probability: A Philosophical Introduction_ introduces and explains the principal concepts and applications of probability. It is intended for philosophers and others who want to understand probability as we all apply it in our working and everyday lives. The book is not a course in mathematical probability, of which it uses only the simplest results, and avoids all needless technicality. The role of probability in modern theories of knowledge, inference, induction, causation, laws of nature, action and decision-making makes an understanding of (...) it especially important to philosophers and students of philosophy, to whom this book will be invaluable both as a textbook and a work of reference. In this book D. H. Mellor discusses the three basic kinds of probability – physical, epistemic, and subjective – and introduces and assesses the main theories and interpretations of them. The topics and concepts covered include: * chance * frequency * possibility * propensity * credence * confirmation * Bayesianism. _Probability: A Philosophical Introduction_ is essential reading for all philosophy students and others who encounter or need to apply ideas of probability. (shrink)

Interest in John Maynard Keynes has increased significantly over the past decade with the publication of his collected writings, increased access to his unpublished papers, and the resulting explosion of secondary literature. Responding to this renewed attention, this collection brings together economists and historians of economics with scholars from philosophy and other related fields to reconsider Keynes’s work and its legacy. Several of these essays look at Keynes not simply as an economist, but more broadly as a philosopher. Special attention (...) is directed to his views on aesthetics and moral philosophy, as well as his contributions as a probability theorist. The development of the Keynesian heritage is also considered: How did Keynesian ideas become assimilated and domesticated into the mainstream of economic thought—to the point of becoming dominant as the orthodoxy of the economics profession? What was the relationship between postwar British conservatives, Keynes’s work, and Britain’s relative economic decline? The archivist in charge of Keynes’s papers provides an additional vantage point on Keynes’s working methods and the broad range of scholars interested in his writings. Finally, all of the essays are followed by a responder’s comments, thus providing an exchange of viewpoints. _Contributors. _A. W. Coats, Allin F. Cottrell, Jacqueline Cox, William Darity, John Davis, Robert Dimand, Peter Groenewegen, Kevin Hoover, Henry E. Kyburg Jr., David Laidler, Michael S. Lawlor, Greg Lilly, D. E. Moggridge, R. M. O’Donnell, Kerry Pearce, Jochen Runde, Teddy Seidenfeld, J. D. Tomlinson. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Whose New American Poetry? Anthologizing in the NinetiesMarjorie Perloff (bio)In the two-year span 1993–94, no fewer than three major poetry anthologies appeared that featured the poetry of what has been called “the other tradition”—the tradition inaugurated thirty-five years ago by Donald M. Allen’s New American Poetry: 1945–1960. These three anthologies are, in order of publication, Eliot Weinberger’s American Poetry since 1950: Innovators and Outsiders, Paul Hoover’s Postmodern American (...) Poetry, and Douglas Messerli’s From the Other Side of the Century. A New American Poetry 1960–1990. 1 In 1994, moreover, there were two other large anthologies of alternate poetries by “younger” poets, 2 these two in the tradition of Ron Silliman’s In The American Tree: Language, Poetry, Realism and Douglas Messerli’s earlier ‘Language’ Poetries: An Anthology. They are Peter Gizzi, Connell McGrath, and Juliana Spahr’s two-volume anthology called Writing from the New Coast, 3 and Dennis Barone and Peter Ganick’s The Art of Practice: 45 Contemporary Poets.Five volumes, then, of the “new” alternate poetries. And a sixth—this time a real blockbuster—is in progress: Jerome Rothenberg and Pierre Joris’s two-volume Poems for the Millennium: The University of California Book of Modern and Postmodern Poetry, which differs from all of the above by covering poetry and poetics of the entire twentieth century and from around the world. The first volume of Poems for the Millennium, From Fin-de-Siècle to Negritude (1995), takes us from such “forerunners” of Modernism as Blake, Hölderlin, Dickinson, and Rimbaud through the Futurisms, Dada, Surrealism, and Objectivism, along with complex “galleries” of individual poets, while the second—and sure to be more controversial—volume (1997) brings us up to the global present.A new avant-garde thus seems to be in the making—indeed, oxymoronic as it may sound, a new avant-garde consensus. Yet the countercanonizing of the recent anthologies is not without its own aporias. What these are is my subject here.The Modest OppositionMy starting point is that of the avant-garde anthologists themselves: Donald Allen’s New American Poetry of 1960. From the vantage point of 1995, the most startling thing about the Allen anthology—still acknowledged by all later anthologists as the fountainhead of radical American poetics—is its modesty. The New American Poetry runs to 454 pages, including statements of poetics, biographical notes, and a short bibliography; it contains forty-four poets, all of them having come to prominence in the period between 1945 (the [End Page 104] end of World War II) and 1960 (the date of publication). The four-page preface opens as follows:In the years since the war American poetry has entered upon a singularly rich period. It is a period that has seen published many of the finest achievements of the older generation: William Carlos Williams’ Paterson, The Desert Music and Other Poems, and Journey to Love; Ezra Pound’s The Pisan Cantos, Section: Rock-Drill, and Thrones; H. D.’s later work culminating in her long poem Helen in Egypt; and the recent verse of E. E. Cummings, Marianne Moore, and the late Wallace Stevens. A wide variety of poets of the second generation, who emerged in the thirties and forties, have achieved their maturity in this period: Elizabeth Bishop, Edwin Denby, Robert Lowell, Kenneth Rexroth, and Louis Zukofsky, to name only a few very diverse talents. And we can now see that a strong third generation, long awaited but only slowly recognized, has at last emerged.[xi]Note that Allen introduces the “new” American poetry, not as an “alternative” to anything else but as the successor of two preceding generations. He does not quarrel about the Moderns: if Eliot isn’t included in the above list, it is because he had stopped writing lyric poetry after Four Quartets and had turned to the theater. The cited second generation, moreover, is more “diverse” (Allen’s word) here than it will ever be again in the anthologies: Bishop and Denby, Lowell and Rexroth and Zukofsky. And the third generation, presumably following in the footsteps of the first and second, is now said to... (shrink)