Natural Experiments in Macroeconomics / Nicola Fuchs-Schuendeln, Tarek Alexander Hassan.

Format:

Book

Author/Creator:

Fuchs-Schuendeln, Nicola.

Contributor:

National Bureau of Economic Research.

Hassan, Tarek Alexander.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21228.

NBER working paper series no. w21228

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

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.

Notes:

Print version record

June 2015.