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 | | Causality in Macroeconomics by Kevin D. Hoover ISBN-10: 9780521452175 ISBN-10: 0-521-45217-1 ISBN-13: 9780521452175 ISBN-13: 978-0-521-45217-5 Hardcover 2001-08-13 Cambridge University Press Find Lowest Price |
Editorials | ||
Product Description 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. | ||
Book Description 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. | ||
Reviews | ||
The Lucas critique of econometrics is a footnote to Keynes The basic fundamental flaw in this book is the author's failure to understand the subtle nuances contained in Keynes's critique of Tinbergen's econometric approach in the 1939-40 exchange in the Economic Journal between Keynes and Tinbergen.The omissions in Hoover's(H)exposition are obvious on pages 182-183-184 and in footnote 32 on page 182.Keynes is not just a percursor of Robert Lucas. The Lucas critique represents a small subset of Keynes's much,much larger critique of Tinbergen.Lucas restricts his critique to the effects of changes in government policy on impacting the changing expectations of private sector decision makers over time.Keynes's critique includes not only this variable but quite a few additional variables ,such as changes in technology and innovation,changes in consumer preferences,as well as changes in the existing institutional,political,social and international structure that creates new inductive patterns affecting expectations of the future.There is nothing in the Lucas critique that is new,original,innovative,novel or creative.Keynes gave a general and systematic criticism of Tinbergen which includes the criticisms of Lucas.A vastly superior book on the topics that H tried to cover is the book by Hugo Kuezenkamp,titled"Probability,Econometrics and Truth".It was published in 2001,the same year as the Hoover volume appeared.Not surprisingly,Hoover does not cite any of Keuzenkamp's published work.Keuzenkamp recognized that the "Lucas" critique had already been done by Keynes in 1939-1940.Nowhere in Keuzenkamp's book is the "Lucas"critique mentioned.The reason is that its already all contained in Keynes's analysis of 1939-1940 ,which follows directly from Keynes's analysis in Parts III and V of the TP.Hoover needs to read this book if he ever intends to revise his own book in a future edition. | ||