The Credibility Revolution in Empirical Economics

"We argue that a clear-eyed focus on research design is at the heart of the credibility
revolution in empirical economics. We begin with an overview of Leamer’s (1983) critique and his suggested remedies, based on concrete examples of that time. We then turn to the key factors we see contributing to improved empirical work, including the availability of more and better data, along with advances in theoretical econometric understanding, but especially the fact that research design has moved front and center in much of empirical micro. We offer a brief digression into macroeconomics and industrial organization, where progress—by our lights—is less dramatic, although there is work in both fields that we find encouraging. Finally, we discuss the view that the design pendulum has swung too far. Critics of design-driven studies argue that in pursuit of clean and credible research designs, researchers seek good answers instead of good questions. We briefly respond to this concern, which worries us little (Link to the full paper)."

Their conclusion: Modern econometrics works!

HT: Tim Harford.