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Dec
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Correlation
December 2, 2008 | 2 Comments | Joshua Gans
So the stock market dived today on news that the NBER found that the US has been in recession for a year. And they wonder why it is hard to separate out correlation from causation in the data!
Comments
2 Responses to “Correlation”
I disagree. That may be the case in social sciences, but finance is an entirely different phenomenon. Theory fits the data almost perfectly, modulo a few “blind points”. Thus, causation can be captured by correlation.
I don’t necessarily understand you point. Are you suggesting that eg the NBER commentary is simply a correlation, or has had an effect on ‘recession’ thinking?