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)

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)

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)

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)

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.

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!’.

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)

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)

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)

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)

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)

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)

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)

(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.

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)

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)

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)

A definition of emotion common to the affective sciences is an urgent desideratum. Lack of such a definition is a constant source of numerous misunderstandings and a series of mostly fruitless debates. There is little hope that there ever will be agreement on a common definition of emotion, given the sacred traditions of the disciplines involved and the egos of the scholars working in these disciplines. Our aim here is more modest. We propose a list of elements for a working (...) definition of emotion and discuss the justification for the inclusion of elements from our respective perspectives (philosophy and psychology). This working partial definition may at least serve as a litmus test to examine theories of emotion, old and new, across disciplinary boundaries. (shrink)

We argue that explainable artificial intelligence (XAI), specifically reason-giving XAI, often constitutes the most suitable way of ensuring that someone can properly be held responsible for decisions that are based on the outputs of artificial intelligent (AI) systems. We first show that, to close moral responsibility gaps (Matthias 2004), often a human in the loop is needed who is directly responsible for particular AI-supported decisions. Second, we appeal to the epistemic condition on moral responsibility to argue that, in order to (...) be responsible for her decision, the human in the loop has to have an explanation available of the system’s recommendation. Reason explanations are especially well-suited to this end and we examine whether – and how – it might be possible to make such explanations fit with AI systems. We support our claims by focusing on a case of disagreement between human in the loop and AI system. (shrink)

An important and engaging book on a key argument in contemporary debates about free will and moral responsibility.

In lieu of an abstract, here is a brief excerpt of the content:A Response to Louise Pascale, “Dispelling the Myth of the Non-Singer: Embracing Two Aesthetics for Singing”Maya HooverLouise Pascale encourages a redefinition of the word "singer" and suggests ways to make it apply to a broader spectrum of people. The problem with the current definition, she believes, is that it is outdated and needs to be changed in order to better embrace the ideals of current society. In order to (...) fully understand the problem and incorporate her suggestions, it is helpful to look at the issue as a symptom of a larger philosophical problem and to examine her proposed aesthetics from a non-philosophical perspective. [End Page 202]A Philosophical Approach to an Ethnographic StudyPascale specifies the current definition of singer as one understood in terms of values set by a white, middle class, American society. She argues that this definition is a direct result of the actions of the church in the 1600s, which has influenced and effected how North Americans (specifically people from the United States) perceive and experience singing. She refers to the manner in which this definition is significantly rooted in history and has only strengthened with time as a "taproot" in music education.Pascale's main argument revolves around the fact that we in the United States have adopted and ascribe to the Western European value system of singing. She notes that in the quest to extract the highest form of singing, we tend to sort out the very best and tell everyone else not to bother. This elitist attitude is a serious problem and she is quite right to point it out. Although there is nothing wrong with classical studies revolving around a canon, we are often taught that anything else is not worthy of study or practice. As a result, we have a very narrow perception of singing due to the guidelines set by the "taproot philosophy," which greatly limits musical expression on many levels.The issue of Western European elitism in the United States is a big one that many scholars and educators like to avoid for fear of offending tradition. In Onika's case, she becomes completely redefined as a non-singer by these elitist constraints. Pascale hints at this concept at other points in her essay, but Onika's story stands out as a blatant example of subjugation.Pascale's story about her own trials in trying to learn about African dance and drumming reinforces the idea of Western elitism. She refers to Christopher Small's idea about the Western value of timing and rhythm, which is linked to "a more logical relationship between pitch and harmony."2 It is important to note that while Pascale was frustrated with her Western background, she was still encouraged by her Ghanaian instructor. She may have felt incompetent, but she was by no means subjugated, as Onika had become.Pascale relates both experiences to the link between culture, society, and the construction of belief systems. However, there is a deeper connection here that deals specifically with American society and its attitude toward those with a different belief system. Looking at other cultures shows how societies can encourage the exploration of their music by giving participants permission to be imperfect and accepting the interest in their culture with grace. This poses a question that is much larger than Pascale's original one, but one that is intricately linked to it: Why do we, as members of American society, continue to perpetuate the subjugation of anyone from outside of our established network of beliefs? [End Page 203] The problem of singers versus non-singers seems only to be a symptom of a much larger illness that is well deserving of a much deeper exploration.The Second Aesthetic from a Scientific Vantage PointPascale explores how the phenomenon of the "non-singer" translates into the music classroom. She argues that there must be a way to maintain the classical tradition while simultaneously allowing everyone to participate, trained or not. There must also be a way to allow every classroom teacher to feel comfortable singing with her/his students, and likewise to allow every student to feel comfortable enough to participate.She suggests incorporating... (shrink)

Introduction -- Organization, society and politics -- An Aristotelian perspective -- The politics -- The public good -- The rhetoric -- Talk and texts -- The Nichomachean ethics -- Decision making and ethics -- The Poetics -- Bolshevism to ballet in three steps -- What is "public interest"?: a case study -- Where do we go from here?

There is growing interest in understanding and eliciting division of labor within groups of scientists. This paper illustrates the need for this division of labor through a historical example, and a formal model is presented to better analyze situations of this type. Analysis of this model reveals that a division of labor can be maintained in two different ways: by limiting information or by endowing the scientists with extreme beliefs. If both features are present however, cognitive diversity is maintained indefinitely, (...) and as a result agents fail to converge to the truth. Beyond the mechanisms for creating diversity suggested here, this shows that the real epistemic goal is not diversity but transient diversity. (shrink)

In _Marx at the Margins_, Kevin Anderson uncovers a variety of extensive but neglected texts by the well-known political economist which cast what we thought we knew about his work in a startlingly different light. Analyzing a variety of Marx’s writings, including journalistic work written for the _New York Tribune_, Anderson presents us with a Marx quite at odds with our conventional interpretations. Rather than providing us with an account of Marx as an exclusively class-based thinker, Anderson here offers (...) a portrait of Marx for the twenty-first century: a global theorist whose social critique was sensitive to the varieties of human social and historical development, including not just class, but nationalism, race, and ethnicity, as well. _Marx at the Margins _ultimately argues that alongside his overarching critique of capital, Marx created a theory of history that was multi-layered and not easily reduced to a single model of development or revolution. Through highly-informed readings on work ranging from Marx’s unpublished 1879–82 notebooks to his passionate writings about the antislavery cause in the United States, this volume delivers a groundbreaking and canon-changing vision of Karl Marx that is sure to provoke lively debate in Marxist scholarship and beyond. (shrink)

This paper advances the conception of social entrepreneurs as caring entrepreneurs. We argue that the care ethics of social entrepreneurs, implying the pursuit of caring goals through caring processes, can be challenged when they engage in the process of scaling up their ventures. We propose that social entrepreneurs can sustain their care ethics as the essential dimension of their venture only if they are able to build a caring enterprise. Organizational care designates the set of organizing principles that facilitate the (...) embedding of care ethics at an organizational level, beyond the imprinting induced by social entrepreneurs’ personal ethics. (shrink)

_Challenges conventional understandings of Heidegger’s account of the body._.

This paper offers a phenomenological analysis of Heidegger’s account of “the uncanny” as it relates to the coronavirus pandemic. It explores how the pandemic has disrupted Dasein’s sense of “homelike” familiarity and how this disruption has undermined our ability to be, that is, to understand or make sense of things. By examining our experience of temporality, lived-space, and intersubjectivity, the paper illuminates different ways in which the pandemic has left us confused and anxious about our self-interpretations and future projects. The (...) paper concludes by showing how the uncanny is not simply something we feel in times of crisis; it is, for Heidegger, who we are. This means the secure feeling of familiarity that we embodied prior to the pandemic was an illusion all along, that we are not and never have been at-home in the world. (shrink)

Increasingly, epistemologists are becoming interested in social structures and their effect on epistemic enterprises, but little attention has been paid to the proper distribution of experimental results among scientists. This paper will analyze a model first suggested by two economists, which nicely captures one type of learning situation faced by scientists. The results of a computer simulation study of this model provide two interesting conclusions. First, in some contexts, a community of scientists is, as a whole, more reliable when its (...) members are less aware of their colleagues' experimental results. Second, there is a robust tradeoff between the reliability of a community and the speed with which it reaches a correct conclusion. ‡The author would like to thank Brian Skyrms, Kyle Stanford, Jeffrey Barrett, Bruce Glymour, and the participants in the Social Dynamics Seminar at University of California–Irvine for their helpful comments. Generous financial support was provided by the School of Social Science and Institute for Mathematical Behavioral Sciences at UCI. †To contact the author, please write to: Department of Philosophy, Baker Hall 135, Carnegie Mellon University, Pittsburgh, PA 15213-3890; e-mail: [email protected]. (shrink)