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- Title
DIFFICULTIES WITH TESTING FOR CAUSATION.
- Authors
Jacobs, Rodney L.; Leamer, Edward E.; Ward, Michael P.
- Abstract
This paper examines the use of econometric tests for causality that are based on the work of Granger and Sims. The main conclusion is that it is not possible to infer the direction of causation from observed correlations. There are two reasons why the causality tests cannot reveal the direction of causation from observed correlations. First, the null hypothesis tested is necessary but not sufficient to imply causality. Second, any specification error renders the causality test results uninterpretable.
- Subjects
CAUSATION (Philosophy); ECONOMETRICS; ECONOMETRIC models
- Publication
Economic Inquiry, 1979, Vol 17, Issue 3, p401
- ISSN
0095-2583
- Publication type
Article
- DOI
10.1111/j.1465-7295.1979.tb00538.x