What is macroeconomic causality?

Abstract

The paper aims to develop an adequate account of macroeconomic causality. It discusses the definition that is central to Woodward’s interventionist account and the definitions that can be extracted from Hoover’s remarks on privileged parameterization and from the potential outcome approach that Angrist and Kuersteiner have introduced into macroeconomics more recently. The definition to be defended can be regarded as the gist that is common to all three definitions when they are relieved of overly restrictive conditions. It says (roughly) that X causes Y if and only if there is a possible intervention on X that changes Y, where X and Y stand for macroeconomic aggregates, where an intervention is understood as a manipulation of an intervention variable I that satisfies conditions requiring that I be a cause of X, and that there be no confounders of X and Y, and where an intervention variable is either a variable or a parameter.