In Search of Verae Causae: The Keynes-Tinbergen Debate Revisited

A popular subject in discussion on Keynes and statistical inference is the Keynes-Tinbergen debate, which appeared in The Economic Journal in the late 1930s and early 1940s. The subject re-emerged in the literature in the second half of the 1970s and continued into the 1990s. The Keynes-Tinbergen debate is considered to be the starting point of a discussion on a host of technical econometric pitfalls and methodological difficulties attached to the statistical testing of economic theory. Although the discussion has focussed on the question to which degree the debate has had bearings on the further development of econometrics and applied economics, this paper highlights the issue of causal explanation in business cycle theory. The implications of the Keynes-Tinbergen debate may be extended to a discussion on the theoretical claims of originality.