Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/252205 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15081
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper examines the econometric causal model for policy analysis developed by the seminal ideas of Ragnar Frisch and Trygve Haavelmo. We compare the econometric causal model with two popular causal frameworks: Neyman-Holland causal model and the do-calculus. The Neyman-Holland causal model is based on the language of potential outcomes and was largely developed by statisticians. The do-calculus, developed by Judea Pearl and co-authors, relies on Directed Acyclic Graphs (DAGs) and is a popular causal framework in computer science. We make the case that economists who uncritically use these approximating frameworks often discard the substantial benefits of the econometric causal model to the detriment of more informative economic policy analyses. We illustrate the versatility and capabilities of the econometric framework using causal models that are frequently studied by economists.
Subjects: 
policy analysis
econometric models
causality
identification
causal calculus
directed acyclic graphs
simultaneous treatment effects
JEL: 
C10
C18
Document Type: 
Working Paper

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