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Causality As A Tool For Empirical Analysis In Economics

Author

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  • Pavlína Hejduková

    (Faculty of Economics, University of West Bohemia)

  • Lucie Kureková

    (Faculty of Economics, University of Economics)

Abstract

This paper deals with the causal determination of phenomena (briefly causality) as a tool for empirical analysis in economics. Although is the causality difficult to grasp, they are built on the basis of many scientific theories, including economic theory. Causality is very hot topic today, both in philosophy and economics. The causality is used in many multi-sectorial disciplines and the concept of causality is different in various disciplines. In economics, we encounter many assertions that connect cause and effect, but causal relationships are not clearly expressed. At first glance, there may be confusion between cause and effect and the phenomena studied can then be viewed in terms of causality and vice versa. The causality plays very important role in econometric and economics. The paper focused on using of causality in economics and econometric studies. The paper begins with a brief overview of theoretical definition of the causality. Then, the empirical approaches to causality in economics and econometric and selected tools of causality are presented and discussed and the case study of possible using of Granger Causality Test is shown. At the end of the paper we discuss the significance of the Grander Causality Test in economics. The aims of this paper are following: to define the different approaches to causality and describe a short history of this term, to analyse selected econometric methods in interaction with causality and to show on the example of Granger Causality Test using of causality in empirical analysis in economics.

Suggested Citation

  • Pavlína Hejduková & Lucie Kureková, 2016. "Causality As A Tool For Empirical Analysis In Economics," Proceedings of Business and Management Conferences 4407035, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:ibmpro:4407035
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    File URL: https://iises.net/proceedings/4th-business-management-conference-istanbul/table-of-content/detail?cid=44&iid=008&rid=7035
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    References listed on IDEAS

    as
    1. Kincaid,Harold, 1996. "Philosophical Foundations of the Social Sciences," Cambridge Books, Cambridge University Press, number 9780521482684.
    2. Granger, C. W. J., 1980. "Testing for causality : A personal viewpoint," Journal of Economic Dynamics and Control, Elsevier, vol. 2(1), pages 329-352, May.
    3. 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.
    4. Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Lucie Kurekova & Klara Cermakova & Eduard Hromada & Bozena Kaderabkova, 2023. "Public funding in R&D and R&D outcome sustainable development: Analysis of Member States EU," International Journal of Economic Sciences, European Research Center, vol. 12(2), pages 40-62, November.

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    More about this item

    Keywords

    Causality; Economics; Econometric; Empirical Analysis; Granger; Granger Causality Test;
    All these keywords.

    JEL classification:

    • B16 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Quantitative and Mathematical
    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General

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