Practice ahead of theory: instrumental variables, natural experiments and inductivism in econometrics
This paper argues that the field of econometrics divides into camps of sinners and preachers. Specifically, I look at two sins condemned by the preachers: the making of causal background assumptions when identifying parameters for estimation and the estimation of parameters that have no or little theoretical significance. I argue that practitioners in the natural experiments literature happily commit these sins and that this is for the good of the discipline
HB Economic Theory
Publisher: Centre for Philosophy of Natural and Social Sciences, London School of Economics and Political Science.
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