Causal relations in econometric models and their impact on the capabilities of OLS

Safaa Abdul-Jabbar Al-Musawi, Dr.

	Causal relations in econometric models and their impact on the capabilities of OLS
Iraqi Journal For Economic Sciences
Article 1, Volume 0, Issue 14, 2017, Pages 66-80
Author
Dr. Safaa Abdul-Jabbar al-Musawi
Abstract
Was and remains problematic concept of causality one of the most important dialectics of science at the various kinds, but elevated in some science recognized the importance of one of the basics of understanding the nature of the phenomena studied in physics, for example, we find that the evolution of the concept of causation from causal absolute Newton down to the causal relative to Einstein have revolutionized the interpretation of relations between physical phenomena, and with respect to the specific econometric economic relations on various forms implicitly assume the existence of a causal condition for the promise of a valid and these causal features a number of features and properties. This research addresses the problematic concept of causality in econometrics from the premise that a starting point: that the essence of econometrics is based on the concept of causality between the variables representing economic phenomena, but this causal order is a valid concept. Must meet the conditions and determine the direction of causality between the variables in the standard model affect the methods and econometric methods, including the method of least squares standard OLS.

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