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Non-linear dependence and Granger causality: A vine copula approach

Roberto Fuentes-Martínez, Irene Crimaldi, Armando Rungi

arXiv 23 Sep 2024 · Econometrics · 1 citations (OpenAlex)

arXiv:2409.15070 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Inspired by Jang et al. (2022), we propose a Granger causality-in-the-mean test for bivariate $k-$Markov stationary processes based on a recently introduced class of non-linear models, i.e., vine copula models. By means of a simulation study, we show that the proposed test improves on the statistical properties of the original test in Jang et al. (2022), and also of other previous methods, constituting an excellent tool for testing Granger causality in the presence of non-linear dependence structures. Finally, we apply our test to study the pairwise relationships between energy consumption, GDP and investment in the U.S. and, notably, we find that Granger-causality runs two ways between GDP and energy consumption.

Citation extraction

40
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Jang, H., J.-M. Kim, and H. Noh (2022) Vine copula granger causality in mean1.000256100%
2Song, X. and A. Taamouti (2018, April) (2018) Measuring Nonlinear Granger Causality in Mean1.00093100%
3Fallahi, F (2011) Causal relationship between energy consumption (ec) and gdp: A markov-switching (ms) causality0.9416383%
4Kraft, J. and A. Kraft (1978) On the relationship between energy and gnp0.9285380%
5Diks, C. and V. Panchenko (2006) A new statistic and practical guidelines for nonparametric granger causality testing0.87462100%
6Aslan, A., N. Apergis, and S. Yildirim (2014) Causality between energy consumption and gdp in the u.s.: Evidence from wavelet analysis0.7373367%
7Bowden, N. and J. E. Payne (2009) The causal relationship between u.s. energy consumption and real output: A disaggregated analysis0.7373367%
8Stern, D. I (1993) Energy and economic growth in the usa: A multivariate approach0.7373367%
9Stern, D. I (2000) A multivariate cointegration analysis of the role of energy in the us macroeconomy0.7373367%
10Kim, J.-M., N. Lee, and S. Y. Hwang (2020) A copula nonlinear granger causality0.73732100%

Showing the top 10 of 40 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Granger Causality in Expectiles: an M-vine copula test0.73732
2Local Gaussian copula inference with structural breaks: testing dependence predictability0.40511