Jihee Kim

Do large language models (LLMs) exhibit systematic ideological bias when reasoning about economic causal effects? As LLMs are increasingly used in policy analysis and economic reporting, where directionally correct causal judgments are essential, this question has direct practical stakes. We present a systematic evaluation by extending the EconCausal benchmark with ideology-contested cases—instances where intervention-oriented (pro-government) and market-oriented (pro-market) perspectives predict divergent causal signs. From 10,490 causal triplets (treatment–outcome pairs with empirically verified effect directions) derived from top-tier economics and finance journals, we identify 1,056 ideology-contested instances and evaluate 20 state-of-the-art LLMs on their ability to predict empirically supported causal directions. We find that ideology-contested items are consistently harder than non-contested ones, and that across 17 of 20 models, accuracy is systematically higher when the empirically verified causal sign aligns with intervention-oriented expectations than with market-oriented ones. Moreover, when models err, their incorrect predictions disproportionately lean intervention-oriented—and this directional skew is not eliminated by one-shot in-context prompting. These results highlight that LLMs are not only less accurate on ideologically contested economic questions, but systematically less reliable in one ideological direction than the other, underscoring the need for direction-aware evaluation in high-stakes economic and policy settings.

Scientific reasoning rarely stops at what is directly observable; it often requires uncovering hidden structure from data. From estimating reaction constants in chemistry to inferring demand elasticities in economics, this latent structure recovery is what distinguishes scientific reasoning from curve fitting. Large language models (LLMs) can often recall and apply relevant scientific formulas, but we show that this ability is surprisingly easy to suppress. We show that adding in-context examples makes models rely less on pretrained domain knowledge, even when those examples are generated by the very same formula. Rather than reinforcing knowledge-driven derivation, examples shift computation toward empirical pattern fitting. We document this knowledge displacement on 60 latent structure recovery tasks across five scientific domains, 6,000 trials, and four models. This displacement is consistent across domains, but its accuracy consequences depend on how the displaced strategy compares to the one that replaces it: the same shift can lower accuracy, leave it unchanged, or appear to improve it. In all cases, however, the model shifts away from knowledge-driven reasoning. For practitioners deploying LLMs on scientific tasks, the message is cautionary: in-context examples may displace, rather than reinforce, the knowledge they are intended to support.