The Nature of Causality and its Dark Aspect
35 Pages Posted: 28 Jan 2018
Date Written: January 19, 2018
The hidden nature of causality is a puzzling yet critical notion for effective decision-making policies on climate, ecology, systemic risk, financial regulation, and much else. We propose a method, based on pattern analysis, which scrutinizes beneath the surface of abstract causality and unveils the very nature of causal interactions. Except for the anticipated positive and negative aspects, we disclose an uncharted and complex form of interactions, namely dark causality. The approach is validated by models that we know the type of causal interaction a priori. Then the method is applied to real datasets from ecology, physiology and finance. The proposed quantification framework of dark causality extends our understanding for interconnected dynamical systems.
Keywords: Causality, Complex Systems, Interconnected Dynamical Systems
JEL Classification: C00, C01, C02, C10
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