## Causal Parameters and Policy Analysis in Economics: A Twentieth Century Retrospective." Quarterly Journal of Economics 115 (February

Venue: | In Means-Tested Transfers in the |

Citations: | 57 - 4 self |

### BibTeX

@INPROCEEDINGS{Heckman_causalparameters,

author = {James L. Heckman and James L. Heckman and James J. Heckman},

title = {Causal Parameters and Policy Analysis in Economics: A Twentieth Century Retrospective." Quarterly Journal of Economics 115 (February},

booktitle = {In Means-Tested Transfers in the},

year = {},

pages = {45--97},

publisher = {University of Chicago Press}

}

### Years of Citing Articles

### OpenURL

### Abstract

JEL No. C10 The major contributions of twentieth century econometrics to knowledge were the definition of causal parameters when agents are constrained by resources and markets and causes are interrelated, the analysis of what is required to recover causal parameters from data (the identification problem), and clarification of the role of causal parameters in policy evaluation and in forecasting the effects of policies never previously experienced. This paper summarizes the development of those ideas by the Cowles Commission, the response to their work by structural econometricians and VAR econometricians, and the response to structural and VAR econometrics by calibrators, advocates of natural and social experiments, and by nonparametric econometricians and statisticians.

### Citations

1785 | Time Series Analysis - Hamilton - 1994 |

924 | The Logic of Scientific Discovery - Popper - 1959 |

547 | Analysis of panel data - Hsiao - 1986 |

504 | Advanced Econometrics - Amemiya - 1985 |

490 | Essays in Positive Economics - Friedman - 1953 |

463 | Identification and Estimation of Local Average Treatment Effects - Imbens, Angrist - 1994 |

413 | The Causal Effect of Education on Earnings - Card - 1999 |

327 |
Dynamic Fiscal Policy
- Auerbach, Kotlikoff
- 1987
(Show Context)
Citation Context ...logically possi36ble. Anchoring them in data, however loosely, gives them some plausibility. Routinely performed sensitivity analyses reveal which parameters are crucial and which are not important (=-=Auerbach and Kotlikoff, 1987-=-). These findings serve to direct the attention of empirical analysts toward estimating economically important parameters. At the time of this writing, it is unclear whether the calibration movement i... |

312 | The Design of Experiments - Fisher - 1935 |

312 | The economics and econometrics of active labor market programs - Heckman, Lalonde, et al. - 1999 |

252 |
Economic Growth and Business Cycles
- Cooley, Prescott
- 1995
(Show Context)
Citation Context ...Srinivasan and Whalley, 1999). In the real business cycle models, parameters are picked from time-series averages to match the parameters of simple models that produce growth steady states (see, e.g. =-=Cooley and Prescott, 1995-=-). In other branches of this literature, calibrators pick parameters from micro studies. This practice has been criticized because the source micro models are often based on assumptions about the econ... |

251 | Household Saving: Micro Theories and Micro Facts - Lusardi - 1996 |

174 | Forecasting Economic Time Series - Granger, Newbold - 1977 |

163 | Bayesian inference for causal effects: The role of randomization - Rubin - 1978 |

162 | Convergence of Probability Measures. Second edition - Billingsley - 1999 |

153 | The rhetoric of economics - McCloskey - 1985 |

145 | Consumer Demand: A New Approach - Lancaster - 1971 |

111 |
Formulating and estimating dynamic linear rational expectations models
- Hansen, Sargent
- 1980
(Show Context)
Citation Context ...ynamic theory does not typically produce simple functional forms for estimating equations. Vector autoregression models like (7) and (8) rarely capture the dynamic economic theory in an explicit way (=-=Hansen and Sargent, 1980-=-, 1991). Problems of estimating the parameters of large-scale static general equilibrium models are equally formidable. Many of these new dynamic models produce a rich dynamics with qualitative proper... |

99 | Money, Income and Causality - Sims - 1972 |

97 | R&D and Productivity: Econometric Results and Measurement Issuesâ€ť, Chapter 3 - Griliches - 1995 |

97 | Varieties of Selection Bias - Heckman - 1990 |

91 | Identification Problems in the Social Sciences - Manski - 1995 |

83 | New methods for analyzing structural models of labor force dynamics - Flinn, Heckman - 1982 |

81 | The Empirical Content of the Roy Model - Heckman, Honore - 1990 |

76 |
Business cycles fluctuations
- Stock, Watson
- 1998
(Show Context)
Citation Context ... (1999) include imposing other restrictions on the A and the D to accord with features of the model viewed to be intuitively satisfactory such as long-run neutrality of certain variables.46 (See also =-=Shapiro and Watson, 1988-=-.) Alternative identifying assumptions produce different estimates of the importance of the innovations. The goals of estimating the impacts of new policies never previously experienced or of assessin... |

75 | Capital Theory and Investment Behavior - Jorgenson - 1963 |

72 | Union Relative Wage Effects: A Survey - LEWIS - 1986 |

68 | Instrumental variables methods for the correlated random coefficient model: estimating the average rate of return to schooling when the return is correlated with schooling - Heckman, Vytlacil - 1998 |

68 | The method of path coefficients - Wright - 1934 |

63 | Alternative methods for solving the problem of selection bias in evaluating the impact of treatments on outcomes - Heckman, Robb - 1986 |

62 |
The empirical foundations of calibration
- Hansen, Heckman
- 1996
(Show Context)
Citation Context ... practice has been criticized because the source micro models are often based on assumptions about the economic environments that are incompatible with the assumptions of the calibrated macro model. (=-=Hansen and Heckman, 1996-=-). This research program emphasizes interpretability of the estimates in terms of economic models and subjects the calibrated models to rigorous internal consistency checks. Certain features of data (... |

62 | Testing the quantity-quality fertility model: The use of twins as a natural experiment. Econometrica - R, Wolpin - 1980 |

61 | Econometric Theory - Goldberger - 1964 |

56 | Bounds on Treatment Effects from Studies with Imperfect Compliance - BALKE, PEARL - 1997 |

54 | Economic measurements for policy and predictions - Marschak - 1953 |

54 | Measures of Fit for Calibrated Models
- Watson
- 1993
(Show Context)
Citation Context ...n real business cycle models fit by calibration have been subject to rigorous empirical testing of the sort used in VAR econometrics, they have performed poorly in terms of goodness-of-fit criteria. (=-=Watson, 1993-=-). Given the weak empirical foundations for these models, it is not surprising that the policy counterfactuals based on them are controversial and few outside the subfield take the estimates of the we... |

46 | On the Formulation of Empirical Models in Dynamic Econometrics - Hendry, Richard - 1982 |

44 | Graphs, causality, and structural equation models - Pearl - 1998 |

43 | Random Simultaneous Equations and the Theory of Production." Econometrica 12 - Marshak, Andrews - 1944 |

42 | Propagation problems and impulse problems in dynamic economics - Frisch - 1933 |

42 | Computation, causation, and discovery - Glymour, Cooper - 1999 |

41 | Statistical problems in agricultural experiments. Supplement to the - Neyman - 1935 |

37 | On the statistical treatment of linear stochastic difference equations - Mann, Wald - 1943 |

36 | The summation of random causes as the source of cyclic processes - Slutsky - 1927 |

31 | Testing Macroeconometric Models - Fair - 1994 |

25 | Labor Force Participation of Married Women - Mincer - 1962 |

24 | The scientific illusion in empirical macroeconomics - Summers - 1991 |

23 | The Tariff on Animal and Vegetable Oils - Wright - 1928 |

20 | The Theory of the Design of Experiments - Cox, Reid - 2000 |

18 | A History of Econometrics - Epstein - 1987 |