title: Causation in economics
text: # Causation in economics
  
  Causation in economics has a long history with Adam Smith explicitly acknowledging its importance via his (1776) An Inquiry into the Nature and Causes of the Wealth of Nations and David Hume (1739, 1742, 1777) and John Stuart Mill (1848) both offering important contributions with more philosophical discussions. Hoover (2006) suggests that a useful way of classifying approaches to causation in economics might be to distinguish between approaches that emphasize structure and those that emphasize process and to add to this a distinction between approaches that adopt a priori reasoning and those that seek to infer causation from the evidence provided by data. He represented by this little table which useful identifies key works in each of the four categories.
  
  | | Structural | Process |
  | - | - | - |
  | A Priori | Cowles Commission: Koopmans (1953); Hood and Koopmans (1953) | Zellner (1979) |
  | Inferential | Simon (1953) Hoover (1990, 2001) Favero and Hendry (1992) Natural Experiments: Angrist and Krueger (1999, 2001) | Granger (1969) Vector Autoregressions: (Sims 1980) |
  