<p>What does it mean when some says they are using an exogenous shock to study the effect of X of Y ?
What is the econometrics condition that defines this intuitively and econometrically?
From my vague understanding, all I think is that if something is an exogenous shock, then it means that it changes Y only through the causal pathway of X. The shock cannot affect Y directly, neither can it affect other variable V that is a confounder to X and Y.
Thanks for the help.</p>

CC BY-SA 4.0
2024-06-05T23:49:05.237Z
I don't know technical you want to get but below is sort of the "classic" paper on exogeneity. Practically speaking, ( from my perspective ), exogenous means that the variable is not a variable that needs to be modelled by the system. It's value is determined outside the system. But it's way more involved than my perspective because there are 3 different types of exogeneity. I couldn't find a free copy. https://econpapers.repec.org/article/ecmemetrp/v_3a51_3ay_3a1983_3ai_3a2_3ap_3a277-304.htm
mark leeds
CC BY-SA 4.0
2024-06-07T07:44:19.877Z
I think your definition is excellent.
Michael Gmeiner
CC BY-SA 4.0
2024-06-08T11:15:43.177Z
Thank you. That's the way I think about it but Engle et al have a VERY technical paper on it. Publish or perish !!!!! All the best.
mark leeds
<microeconomics><econometrics><statistics><causality>
Causal inference exogeneous shock question
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# Causal inference exogeneous shock question

(Asked by: username_0 on 2024-06-05)

What does it mean when some says they are using an exogenous shock to study the effect of X of Y ?
What is the econometrics condition that defines this intuitively and econometrically?
From my vague understanding, all I think is that if something is an exogenous shock, then it means that it changes Y only through the causal pathway of X. The shock cannot affect Y directly, neither can it affect other variable V that is a confounder to X and Y.
Thanks for the help.

**Tags:** microeconomics, econometrics, statistics, causality
> **Comments:**
> **username_1**: I don't know technical you want to get but below is sort of the "classic" paper on exogeneity. Practically speaking, ( from my perspective ), exogenous means that the variable is not a variable that needs to be modelled by the system. It's value is determined outside the system. But it's way more involved than my perspective because there are 3 different types of exogeneity. I couldn't find a free copy. https://econpapers.repec.org/article/ecmemetrp/v_3a51_3ay_3a1983_3ai_3a2_3ap_3a277-304.htm  
> **username_2**: I think your definition is excellent.  
> **username_1**: Thank you. That's the way I think about it but Engle et al have a VERY technical paper on it. Publish or perish !!!!! All the best.  

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## 0 answers

