Daniel Little — Causal concepts

Summary of causation in social science, with link to paper, "Causal Explanation in Social Science" by Daniel Little (1995). Little also wrote a book on social causation entitled, Varieties of Social Explanation.

Understanding Society
Causal concepts
Daniel Little | Chancellor, University of Michigan at Dearborn

See also Little's "Current issues in causation research"

Nick Rowe — How many monetary transmission mechanisms are there?

Read it at Worthwhile Canadian Initiative
How many monetary transmission mechanisms are there?
by Nick Rowe

The ever-resourceful Nick invites us to think about monetary transmission mechanisms, and he suggests that there may be many.

You want concrete steps? I will give you a million different flights of concrete steps.

For example, like Lars Christensen, lets talk about the monetary transmission mechanism where the central bank adjusts the stock price index, rather than a short term nominal interest rate. No zero lower bound problem there.

In case no one has noticed, the Fed is already fixing the stock price index through QE. Indeed, a Fed official admitted that asset prices are higher than they would be otherwise, and it is clear that this is policy objective to increase the "wealth effect." Markets have already priced in QE3 to a degree, and if it is not forthcoming, then eventually this expectation will be discounted.

Daniel Little — Problems with causal mechanisms

There are a couple of problems with the theory of causal mechanisms that will be difficult to address. Jim Mahoney raises a general concern in "Beyond Correlational Analysis" -- there is no consensus about how to define a mechanism. But there are more specific problems as well.

Read it at Understanding Society
Problems with causal mechanisms
by Daniel Little

The around this pseudo-problem is to recognize that cause>effect is simply a way to indicate an irreversible direction of flow within a dynamic system instead of thinking in terms of the simplistic model of one "thing" causing another "thing." It is like mistaking language for labeling.

hbl — Cutting Interest Rates to Boost the Economy: A Fallacy of Composition just like the False Notion of Cutting Wages to Create Jobs?

hbl thinks though monetary policy in terms of a plausible transmission mechanism, i.e., not "expectations."

Read it at Thought Offerings — on macroeconomics, markets, MMT, and more
Cutting Interest Rates to Boost the Economy: A Fallacy of Composition just like the False Notion of Cutting Wages to Create Jobs?

by hbl

Chris Dillow — The State & Growth: What's The Mechanism?

Whenever he was faced with a blustering student - which was often - my old economics tutor, the late Andrew Glyn, would ask: "What's the mechanism?"

Read it at Stumbling and Mumbling
The State & Growth: What's The Mechanism?
by Chris Dillow | Investors Chronicle

Another reason why abstract models don't work and historical-institutional analysis does.