Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1504: On Credibility and Causality in Economics: A Critical Appraisal

Andreas Bergh () and Phillipp C. Wichardt ()
Additional contact information
Andreas Bergh: Dept. of Economics, Lund University, Postal: and Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Phillipp C. Wichardt: Dept. of Economics, University of Rostock; Dept. of Economics, Lund University Kiel Institute for the World Economy; CESifo Munich

Abstract: Borrowing ideas from the medical sciences, we propose tentative guidelines for reliable causal inferences that cover aspects related to both the study itself and its fit with background knowledge. We argue that the current paradigm in economics tends to put too much emphasis on internal aspects related solely to the study itself. To substantiate this view, we discuss various excellent studies from different fields of economics, which all express causal and policy-relevant claims. We conclude that policy implications based on single studies are inherently uncertain, even when the respective studies are state-of-the-art.

Keywords: Causality; Empirical Economics; Methodology; Credibility

JEL-codes: B41; C90; D90

Language: English

26 pages, October 29, 2024

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