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Testing for Causality in Regional Econometric Models

Author

Listed:
  • R. Jeffery Green

    (Wharton EFA, Inc. 3624 Science Center Philadelphia, Pennsylvania 19104 USA)

  • Gary R. Albrecht

    (Indiana University Department of Economics Ballantine Hall Bloomington, Indiana 47401 USA)

Abstract

One of the most common features of regional econometric models is the specification of national variables as exogenous to the regional model. Often these variables appear as distributed lags in the structural equations. Concepts and tests for statistical causality can be used to determine whether this procedure is appropriate in a particular case. This paper discusses these tests and illustrates them with an example from a model being developed of the state of Indiana. It is our view that such tests can be a useful step in the specification of a regional econometric model.

Suggested Citation

  • R. Jeffery Green & Gary R. Albrecht, 1979. "Testing for Causality in Regional Econometric Models," International Regional Science Review, , vol. 4(2), pages 155-164, December.
    • Handle: RePEc:sae:inrsre:v:4:y:1979:i:2:p:155-164
    DOI: 10.1177/016001767900400204
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    References listed on IDEAS

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    1. Pierce, David A. & Haugh, Larry D., 1977. "Causality in temporal systems : Characterization and a survey," Journal of Econometrics, Elsevier, vol. 5(3), pages 265-293, May.
    2. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    3. Larry D. Haugh & David A. Pierce, 1977. "Causality in temporal systems: characterizations and a survey," Special Studies Papers 87, Board of Governors of the Federal Reserve System (U.S.).
    4. Sims, Christopher A, 1972. "Money, Income, and Causality," American Economic Review, American Economic Association, vol. 62(4), pages 540-552, September.
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    1. Remaud, B. & Hernandez, E.S., 1980. "Constants of motion and non-stationary wave functions for the damped, time-dependent harmonic oscillator," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 103(1), pages 35-54.

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