NOBEL for Natural Expriments and Causation.

 The Nobel prize in Economic Sciences 2021 are to be shared by David Card of University of California Berkeley(50%) Joshua D Angrist, Massachusetts Institute of Technology(25%)Guido W Imbens, Stransford University(25%). Since 1990s a "credibility revolution " transformed Economics and instead of theory empirical work got prominence. Today the lion's share of notable research is empirical and predominantly focuses on natural experiments and causation.

      Natural experiments refers to experiments undertaken in the context of changes in nature or policy which provide situations that resemble randomised experiments, and the brilliance of those scholars lies in their ability to recognise these studies and identify the conditions under which causal issues can be reestablished using these naturally occurring phenomenon.David Card's research focuses on how minimum wages, immigration and education affect the labour market.His study published in 1993 analysed to what  happened to employment in fast food restaurants like Burger King,KFC, Wendys and Roy Rogers when New jersey raised its minimum wages from$4.25 to$5.05 . Extensive surveys were undertaken in New Jersey and restaurants in bordering eastern Pennsylvania as the comparison or control group.In contrast to earlier studies Card and his partner late Alan Krueger found that an increase in the minimum wage had no impact on the number of employees since firms may pass on the cost to the consumer .On either side of New Jersey and Pennsylvania border  this natural experiment established that higher wages had no impact on employment.Card's research on minimum wages fundamentally altered economists' view on such policies.On immigration Card's empirical research has shown the economic impact of new immigrants is minimal and they have little or no impact on wages.

 In mid 1990s Joshua D Angrist and Guido W Imbens addressed the methodological problems demonstrating how precise conclusions about cause and effect can be drawn from natural experiments. Understanding cause and effect in social Sciences is impaired because of controlled experiments-such as randomised controlled trials (RCTs) like in other Sciences like Medicine. The main impact of the trio's research is "in getting people to spend a lot more time and effort developing  credible, high quality empirical evidence and in 'calling out 'weak evidence. Angrist and Imbens developed a mathematical formula for extracting reliable information about causation from natural experiments, even if their 'design 'is limited and compromised by unknown circumstances including incomplete compliance by participants. Their approach showed which causal conclusions could and could not be supported in a given situation.

  In short in this era of big data all the three together were  instrumental to rapidly expand the use of natural experiments or studies based on the observation of real world data.Such research made Economics more applicable to every day life provided policy makers with actual evidence on outcomes of policies  spawned a more popular approach to Economics. In fact natural experiments in empirical economics has ushered in much progress in the analysis of causal relationship. This ensuing revolution in the last 3 decades has been transforming the study of key policy challenges including immigration, education and minimum wages. 

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