"If I said something about causal learning, I could point to Patricia Cheng as a keyword to Google. If I said something about dual systems of cognition in economic behavior, I could point to Daniel Kahneman or Jonathan Evans."

Obligatory:

"You just got finished readin' some Marxian historian -- Pete Garrison probably. You're gonna be convinced of that 'til next month when you get to James Lemon, and then you're gonna be talkin' about how the economies of Virginia and Pennsylvania were entrepreneurial and capitalist way back in 1740. That's gonna last until next year -- you're gonna be in here regurgitating Gordon Wood"[1]

[1] https://www.youtube.com/watch?v=azM6xSTT2I0

The Ascent of Money is filled with great citations to the academic literature. Don't have my copy handy, but you should check it out if you're interested in more info about fractional reserves.

You should also read up on "natural experiments." They got us things like the elimination of cholera from major metropolitan areas, the link between smoking and heart disease, and Hubble's Law describing the expansion of the universe. Sometimes looking at the world tells us stuff about the world.

You should also maybe check out the work of John Ioannidis, and the hoax research of John Bohannon, and articles on publication bias. Check out how frequently lab p-values cluster just around publishable.

We've reached a weird state where, give me a natural experiment in economics, where the author actually has to think about and discount possible alternative explanations sufficiently to sway aggressive critics on a contentious topic. Then give me a modern nutrition study claiming that some fad food abruptly cures cancer in rats, with a convenient p of exactly 0.05, which becomes an isolated media frenzy before it's never cited again. I'm going to treat the economics with far more deference, despite my general fondness for double-blind RCT.

EDIT: Also, the original reference was a simile, signaled by words like "essentially" and "like." Ease up a bit with the 'toy words' accusations, I was not trying to claim economics is literally indistinguishable from physics, just that the case studies here are surprisingly compelling, and seem to point in one clear direction.

Not the OP, but there's no such thing as proper experimental setup in economics (because there can't be). That's why using economic/econometric modelling for causal inference is the holy grail of the field.

Some approaches are:

- structural models (google Pearl)

- instrumental variables (google Angrist)

Not an expert but wouldn't randomized controlled trials (part of many economics papers) count as proper experimental setup?

Yes, many economics papers are at the intersection of economics and psychology with a focus on human behavior. One of the broad assumptions of economics is that individuals are largely rational, but controlled experiments sometimes show that people don't always act in their best interest.

But at a macro level, there are no controlled experiments. We can look toward "natural" experiments (e.g., wages and the labor rate of two border towns, where one is in a state that has raised minimum wage and the other has not), but there's nothing like the gold standard double blind randomized trial that you'd find in a drug study.

Thanks for the Judea Pearl reference.