Template-Type: ReDIF-Article 1.0

Author-Name: Zoltan Hermann
Author-Workplace-Name: Centre for Economic and Regional Research, Corvinus University of Budapest
Author-Email: hermann.zoltan@krtk.hu
Author-Person: phe611

Author-Name: Hedvig Horvath
Author-Workplace-Name: University College London
Author-Email: h.horvath@ucl.ac.uk

Author-Name: Attila Lindner
Author-Workplace-Name: University College London
Author-Email: a.lindner@ucl.ac.uk


Title: Answering Causal Questions Using Observational Data - Achievements of the 2021 Nobel Laureates in Economics

Abstract: In the 1980s and 1990s, the field of labour economics was at the forefront of
combining economic theory, high-level econometric methods and new data sources.
The 2021 Nobel Prize in Economics was awarded to David Card, Joshua Angrist
and Guido Imbens, who played key roles in this research, for their "empirical
contributions to labour economics" (Card) and "methodological contributions to the
analysis of causality relationships" (Angrist and Imbens), according to the citation.
These methodological innovations are now applied in all fields of economics and in
many other social science disciplines. Credible empirical analysis has transformed
economics from a rather theoretical discipline into a discipline dominated by
empirical results, where even the most fundamental theories can be rejected on
the basis of empirical results. In this paper, we review the main methodological
achievements of this period, also known as the credibility revolution, illustrated by
some economic applications.

Classification-JEL: J2, J6, I21, I26, C2, C26
Keywords: natural experiment, minimum wage, returns to education, instrumental variables, difference-in-differences, regression discontinuity design
Pages: 141-163
Volume: 21
Issue: 1
Year: 2022
File-URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-21-1-e1-hermann-horvath-lindner.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:21:y:2022:i:1:p:141-163