The effectiveness of one aspect of the London School of Economics (LSE) approach to econometrics is assessed in a simulation study. The paper uses a data set and nine models analogous to those in Lovell's (1983) study of data mining. A simplified general-to-specific algorithm is tested in a...

Graph-theoretic methods of causal search based on the ideas of Pearl (2000), Spirtes "et al". (2000), and others have been applied by a number of researchers to economic data, particularly by Swanson and Granger (1997) to the problem of finding a data-based contemporaneous causal order for the...

This paper examines the efficacy of the general-to-specific modeling approach associated with the LSE school of econometrics using a simulation framework. A mechanical algorithm is developed which mimics some aspects of the search procedures used by LSE practitioners. The algorithm is tested...

The bank lending channel implies the Federal Reserve can influence real income by controlling the level of intermediated loans. Using the notion of causality developed by Simon (1953) and the causal order methodology developed by Hoover (1990), I test for an operative bank lending channel in the...