D-separation, forecasting, and economic science: a conjecture

摘要

The paper considers the conjecture that forecasts from preferred economic models or theories d-separate forecasts from less preferred models or theories from the Actual realization of the variable for which a scientific explanation is sought. D-separation provides a succinct notion to represent forecast dominance of one set of forecasts over another; it provides, as well, a criterion for model preference as a fundamental device for progress in economic science. We demonstrate these ideas with examples from three areas of economic modeling.