Economics · Econometrics
In a Vector Autoregression (VAR) model with two variables X and Y, if lags of Y are jointly significant in the equation for X, but lags of X are jointly insignificant in the equation for Y, what can be concluded?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Neither X nor Y Granger-causes the other
- 2Both X and Y Granger-cause each other
- 3Y Granger-causes X but X does not Granger-cause Y✓
- 4X Granger-causes Y but Y does not Granger-cause X
Correct answer
Y Granger-causes X but X does not Granger-cause Y
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