Transcription of NotesonTestingCausality
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NotesonTestingCausality
NotesonTestingCausalityJin-LungLinInstit uteofEconomics,AcademiaSinicaDepartmento fEconomics,NationalChengchiUniversityMay , Abstract isnotereviewsthede nition,distributiontheoryandmodelingstra tegyoftest-ingcausality. Startingwiththede nitionofGrangerCausality,wediscussvariou sissues on testing causality within stationary and nonstationary systems. In addi-tion, t Dooncausal-itytestingandreviewseveralemp iricalexamples. IntroductionTestingcausalityamongvariabl esisoneofthemostimportantand,yet,oneofth emostdi cultissuesineconomics. edi cultyarisesfromthenon-experimentalnature ofsocialscience. Fornaturalscience,researcherscanperforme xperimentswhere all other possiblecausesare kept xed except for the sole factor under in-vestigation.
Õ Introduction Testingcausalityamongvariablesisoneofthemostimportantand,yet,oneofthe mostdiłcultissuesineconomics. ediłcultyarisesfromthenon-experimental
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