Natural Experiments in Macroeconomics
Fuchs-Schündeln, Nicola and
Tarek Hassan ()
Authors registered in the RePEc Author Service: Nicola Fuchs-Schuendeln
No 10628, CEPR Discussion Papers from C.E.P.R. Discussion Papers
A growing literature relies on natural experiments to establish causal effects in macroeconomics. In diverse applications, natural experiments have been used to verify underlying assumptions of conventional models, quantify specific model parameters, and identify mechanisms that have major effects on macroeconomic quantities but are absent from conventional models. We discuss and compare the use of natural experiments across these different applications and summarize what they have taught us about such diverse subjects as the validity of the Permanent Income Hypothesis, the size of the fiscal multiplier, and about the effects of institutions, social structure, and culture on economic growth. We also outline challenges for future work in each of these fields, give guidance for identifying useful natural experiments, and discuss the strengths and weaknesses of the approach.
Keywords: Civic Capital; Fiscal Multiplier; Institutions; Multiple Equilibria; Networks; Permanent Income Hypothesis; Social Structure; Social Ties; Trust (search for similar items in EconPapers)
JEL-codes: C1 C9 E21 E62 H31 O11 O14 O43 O50 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-soc
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Chapter: Natural Experiments in Macroeconomics (2016)
Working Paper: Natural Experiments in Macroeconomics (2015)
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