Economic Causality in Light of Philosophical Concepts: Distinctly Idiosyncratic

Bernd Hayo ()
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Bernd Hayo: Philipps-Universität Marburg

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: This paper examines causality in contemporary economics through a philosophical lens. Design-based econometrics, centred on the average treatment effect, treats causal effects as population-level expectations under hypothetical interventions, revealing economic causality as distinctly idiosyncratic when examined against established philosophical traditions. The framework is counterfactual and mechanism-agnostic, permitting 'black-box' identification while selectively drawing on Humean diagnostics. Core identification strategies – difference-in-differences, instrumental variables and regression discontinuity designs – derive from medieval causal logic: Ockham's Method of Difference underpins identification, whereas Scotus's Concurrence Method prefigures robustness-based validation. Yet expectation-based, mechanism-agnostic approaches have limits: they can obscure causal processes, and prioritising identification over validation carries epistemological consequences. The paper clarifies the methodological assumptions underlying modern causal inference and highlights the tension between practical policy goals and philosophical rigour in contemporary economics.

Keywords: Economic causality; economic methodology; design-based econometrics; counterfactual causation; dispositional causation; regularity causation; policy evaluation (search for similar items in EconPapers)
JEL-codes: B40 C10 C90 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:202601

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