The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Causality in Economic Nodels

  • Herbert A. Simon
Reference work entry


Causal notions arise when we seek to understand the workings of a complex system by analysing it into component subsystems and mechanisms. Thus, if we wish to understand the quantities of strawberries that are produced and consumed and the prices at which they are exchanged, we may consider a number of mechanisms that affect quantity and price. What mechanisms we will include depends on how widely we draw the boundaries of the system to be examined.

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  1. Goldberger, A.S., and O.D. Duncan. 1973. Structural equation models in the social sciences. New York: Academic.Google Scholar
  2. Hood, W.C., and T.C. Koopmans. 1953. Studies in econometric method. New York: Wiley.Google Scholar
  3. Simon, H.A. 1977. Causes and possible worlds. Section 2. In Models of discovery, ed. H.A. Simon. Dordrecht: D. Reidel.CrossRefGoogle Scholar

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Herbert A. Simon
    • 1
  1. 1.