EconCausal: A Context-Aware Economic Reasoning Benchmark for Large Language Models

Abstract

Socio-economic causal effects depend heavily on their institutional and environmental contexts. The same intervention can produce different, even opposite, effects across regulatory regimes, market conditions, time periods, or populations. This poses a challenge for large language models (LLMs) in decision-support roles: can they infer the direction of a causal effect under a specified context, and revise that judgment when the context changes? To address this, we introduce EconCausal, a large-scale benchmark of 10,490 context-annotated causal triplets extracted from 2,595 high-quality empirical studies in top-tier economics and finance journals, constructed through a rigorous four-stage pipeline with multi-run consensus, context refinement, and multi-critic filtering. Across models, LLMs often fail to condition their predictions on context. While top models reach 88% accuracy in fixed, explicit contexts, accuracy falls by 32.6~pp on cases that require revising the sign across contexts (73.9% to 41.3%), and drops below 50% once misleading signed evidence is introduced. Models also over-commit to directional (+/-) signs, recognizing null effects only 13.8% of the time while remaining poorly calibrated on these categories. The dataset and benchmark are publicly available at https://anonymous.4open.science/r/econcausal-benchmark-6F12.