Investigating Causal Relations by Econometric Models and Cross-spectral Methods

Abstract

There occurs on some occasions a difficulty in deciding the direction of causality between two related variables and also whether or not feedback is occurring. Testable definitions of causality and feedback are proposed and illustrated by use of simple two-variable models. The important problem of apparent instantaneous causality is discussed and it is suggested that the problem often arises due to slowness in recording information or because a sufficiently wide class of possible causal variables has not been used. It can be shown that the cross spectrum between two variables can be decomposed into two parts, each relating to a single causal arm of a feedback situation. Measures of causal lag and causal strength can then be constructed. A generalisation of this result with the partial cross spectrum is suggested.

Cite this paper

Related papers

1. Smoothing and Differentiation of Data by Simplified Least Squares Procedures.1964
2. Trace Element Discrimination Diagrams for the Tectonic Interpretation of Granitic Rocks1984
3. A Guide to the Chemical Classification of the Common Volcanic Rocks1971
4. A Chemical Classification of Volcanic Rocks Based on the Total Alkali-Silica Diagram1986
5. THREE NATURAL ZIRCON STANDARDS FOR U‐TH‐PB, LU‐HF, TRACE ELEMENT AND REE ANALYSES1995