The causal direction between money and prices. An alternative approach
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Causality is viewed as a matter of control. Controllability is captured in Simon's analysis of causality as an asymmetrical relation of recursion between variables in the unobservable data-generating process. Tests of the stability of marginal and conditional distributions for these variables can provide evidence of causal ordering. The causal direction between prices and money in the United States 1950-1985 is assessed. The balance of evidence supports the view that money does not cause prices, and that prices do cause money. © 1991.
Published Version (Please cite this version)10.1016/0304-3932(91)90015-G
Publication InfoHoover, KD (1991). The causal direction between money and prices. An alternative approach. Journal of Monetary Economics, 27(3). pp. 381-423. 10.1016/0304-3932(91)90015-G. Retrieved from https://hdl.handle.net/10161/1974.
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Professor of Economics
Professor Hoover's research interests include macroeconomics, monetary economics, the history of economics, and the philosophy and methodology of empirical economics. His recent work in economics has focused on the application of causal search methodologies for structural vector autoregression, the history of microfoundational programs in macroeconomics, and Roy Harrod's early work on dynamic macroeconomics. In philosophy, he has concentrated on issues related to causality, especially in economi