Linear Causality Research Articles

Unpacking the Complex Socio-Technical Systems Assemblages in Cybersecurity

The ensuing digital transformation means that cybersecurity solutioning increasingly occurs in the context of complex intractable socio-technical systems comprising non-technical elements, including human, social, and societal factors. These evolving cybersecurity ecosystem dynamics, at the confluence of cyber-physical-social spaces, present several challenges to techno-centric cybersecurity solutions including for risk assessment, threat modelling, and incident analysis. This paper unpacks the complexity of the cybersecurity domain and illustrates the associated socio-technical systems assemblages through a case study and situational analysis of a cybersecurity incident. It then reviews socio-technical systems analysis approaches from the safety management domain and discusses the alignment with and relevance for cybersecurity. The utility of these approaches is demonstrated by applying the functional resonance analysis method to the said cybersecurity incident. The situational analysis surfaces the diverse set of factors, including human, non-human, cultural, economic, institutional, and global, that directly played a role in the unfolding of the incident, and which need to be considered in risk assessment and incident analysis. Further, analysing the incident through the functional resonance analysis method shows the functional dependencies and cascade of performance variability between the different elements in this situation, which goes beyond simple, root-cause, linear causality, and purely technical explanations. Overall, the paper explicates the need for cybersecurity risk assessment and incident analysis that is commensurate with the complexity of underlying socio-technical cyber systems.

Towards a qualitative theory of the interruption of eating behavior change

The poor maintenance of eating behavior change is one of the main obstacles to minimizing weight regain after weight loss during diets for non-surgical care of obese or overweight patients. We start with a known informal explanation of interruption in eating behavior change during severe restriction and formalize it as a causal network involving psychological variables, which we extend with energetic variables governed by principles of thermodynamics. The three core phenomena of dietary behavior change, i.e., non-initiation, initiation followed by discontinuation and initiation followed by non-discontinuation, are expressed in terms of the value of the key variable representing mood or psychological energy, the fluctuation of which is the result of three causal relationships. Based on our experimental knowledge of the time evolution profile of the three causal input variables, we then proceed to a qualitative analysis of the resulting theory, i.e., we consider an over-approximation of it which, after discretization, can be expressed in the form of a finite integer-based model. Using Answer Set Programming, we show that our formal model faithfully reproduces the three phenomena and, under a certain assumption, is minimal. We generalize this result by providing all the minimal models reproducing these phenomena when the possible causal relationships exerted on mood are extended to all the other variables (not just those assumed in the informal explanation), with arbitrary causality signs. Finally, by a direct analytical resolution of an under-approximation of our theory, obtained by assuming linear causalities, as a system of linear ODEs, we find exactly the same minimal models, proving that they are also equal to the actual minimal models of our theory since these are framed below and above by the models of the under-approximation and the over-approximation. We determine which parameters need to be person-specific and which can be considered invariant, i.e., we explain inter-individual variability. Our approach could pave the way for universally accepted theories in the field of behavior change and, more broadly, in other areas of psychology.

Research on the Compatibility of Quantum Science and Marxist Philosophy

As an epoch-making achievement in the field of natural science, the scientific principles of quantum mechanics, such as nonlocality, entanglement and decoherence, and role at a distance, have triggered many different interpretations and controversies in the field of philosophy, among which idealism, metaphysics, and agnosticism are based on which to question or even deny dialectical materialism. Marxist philosophy has always closely interacted with natural science. In the face of new and old propositions in quantum mechanics, such as uncertainty principle, quantum tunneling, large distance zero interaction measurement, and Poincare regression of multi particle quantum system, we can promote its compatibility with the new world outlook and methodology of quantum science in the intertextuality interpretation. Quantum mechanics reveals the "intermediate phenomenon" in the process of understanding the micro world, highlighting the dialectical characteristics of materialistic epistemology; It emphasizes probability, but denies that uncertainty is subjective conjecture, defending the objectivity of existence; For the movement and change of things, the status of the contingency category has been improved and the linear causality has been exceeded, but the existence of universal and inevitable connection has not been fundamentally denied.

A Wavelet Analysis of Bitcoin Price Volatility Dynamic

The cryptocurrency market has experienced significant growth in international finance in recent years, attracting a large number of investors. This has led to a substantial increase in the overall trading volume[1], surpassing 1.2 trillion USD in July2023. Bitcoin in particular, has garnered significant interest from both advanced and emerging economies. Notably, Bitcoin is legal tender in El Salvador and the Central African Republic. The cryptocurrency market possesses distinct characteristics that set it apart from traditional markets such as exchanges, commodities, and equities. Its decentralization, facilitated by Blockchain technology, stands as a key differentiating factor. This technology enables anonymous trading of cryptocurrencies, with the identities of market participants, account holders, and electronic wallet managers remaining unknown. Consequently, there is an inherent ambiguity when it comes to characterizing the behavior of these investors or determining their preferred trading horizons. In this context, an important question arises: how do investors in the cryptocurrency market navigate price volatility? Furthermore, how do their trading strategies, which are inherently tied to their investment horizons, impact each other and consequently influence market prices? The heterogeneity hypothesis, which is a prevalent assumption in financial markets, is particularly relevant when exploring how investors in the cryptocurrency market navigate price volatility. The diverse trading strategies and approaches to handling price fluctuations among heterogeneous investors impact and influence the overall volatility and price dynamics of cryptocurrencies. The heterogeneity market hypothesis[2] refers to the existence of differences among investors or traders regarding their beliefs, information, risk preferences, investment strategies, and time horizons. In a heterogeneous market, investors, traders and financial institutions have varying views and expectations about the future performance of assets. These differences can manifest in various ways, such as market information access, market liquidity provision, trading strategies and market structure. While numerous empirical studies have explored the concept of market heterogeneity in relation to traditional assets such as those conducted by Müller et al. (1993;1997), Lux and Marchesi (2000), LeBaron (2000), Dacorogna et al. (2001) and Benhmad (2011), there is a paucity of research on this topic specifically focusing on cryptocurrencies. This paper aims to contribute to the existing literature that investigates the hypothesis of investor heterogeneity in traditional markets, including forex, stocks, and commodities. Specifically, we focus on the cryptocurrency market, which is predominantly dominated by Bitcoin. As of November 2021[3], Bitcoin holds the distinction of being the most actively traded cryptocurrency, with a market capitalization exceeding 1.2 trillion USD. Given its significance, Bitcoin garners substantial interest from investors across various categories. Therefore, this research seeks to uncover potential synergies among participants[4] in the cryptocurrency market and identify investor types and investment horizons prevalent in this market. By understanding these factors, we can gain insights into the dynamic volatility displayed by Bitcoin’s price. To tackle this issue, we investigate Bitcoin’s price volatility, analyzing causal relationships among short-term, medium and long-term traders by using wavelet transform to decompose volatility at different trading frequency scales[5] considered, then Granger causality test will be employed to determine if changes in one scale impact others. Furthermore, we extend this analysis by employing the nonlinear causality test proposed by Hmamouche. Y (2020). This nonlinear causality test goes beyond the limitations of the linear causality test and helps identifying potential nonlinear causal effects that may exist between the volatilities at different frequency scales, which could be overlooked by the linear causality test. The rest of this paper is organized as follows: Section 2 presents the theoretical framework relatively to the heterogeneity market hypothesis. Section 3 focuses on the empirical review. Section 4 and 5 turns to the data and methodology. Section 6 provides the empirical findings. Section 7 concludes.

Functioning of the Family System With an Autistic Child: A Comparative Study Between Poland and California, USA

Objectives of the research: The aims of this research are to conduct a comparison study between the level of communication and flexibility in families with autistic children in two different geographical locations and cultural contexts – California (USA) and Poland (Europe) – to address whether the level of these two dimensions of family functioning are related to the ego-resiliency of the parents, and additionally to discuss the practical implications that can be drawn from the results.
 Research methods: Communication and flexibility profiles in family functioning were collected in Poland and California from September 2016 to February 2018. Data on the similarities and differences between parents of children with autism spectrum disorder in Poland (n=111) and California (n=105) was collected using Olson’s FACES-IV. The Ego-Resiliency Scale was also administered in methodologically standardized conditions and was empirically analyzed along with controlled demographic variables.
 A short description of the context of the issue: Family functioning and ego-resiliency in families with children with autism are analyzed in this research. The richness of interactions and connections within the family system suggests that when explaining the relationships within the family system, the interpretation that is based on linear causality is abandoned and replaced by circular causality, which is the model of analysis utilized in this research project. The main goals of this research were to compare and contrast family functioning in two geographical locations and cultural contexts and to show statistically significant differences between these two groups, in order to better understand cultural variations and differences that may affect family functioning and ego-resiliency and to provide the different groups with adequate, necessary support services.
 Research findings: The results revealed statistically significant differences in various dimensions of Family Communication and Flexibility between families of autistic children in California and Poland. With respect to both variables, higher scores were found in the California group. The flexibility results in both groups were defined as flexible. However, in regards to family communication, the result of the California group corresponded to higher standardized scores, whereas those of the group from Poland revealed moderate standardized scores.
 Conclusions and recommendations: Statistically significant positive correlations were found in the variables of Flexibility and Family Communication between Poland and California. The results of this research are critical, not only from the perspective of scientific development (as similar studies have not been conducted), but also for therapeutic and preventive reasons. They suggest concentrating on preventive activities and aspects that are important for the well-being of the parent as a person, as well as the entire family system, especially the dimensions of communication in families with children with autism spectrum disorder and the ego-resiliency of the parents. However, further research is needed to specifically identify the differences between the groups based on various demographic variables. Additionally, it is important to develop a practical model to support families with autistic children and to address family satisfaction in intervention strategies, as well as to consider the importance of support groups that may improve satisfaction and ego-resiliency within the family system.

Precious metals and currency markets during the Russia-Ukraine conflict’s inflationary periods

The contemporary conflict between two countries Russia and Ukraine has caused intensification in the increasing prices of commodities and energy owing to the supply chain disruption and the sanctions imposed on both countries. The previous literature has validated that Russia-Ukraine conflict substantially affects financial and economic operations of other countries. Therefore, the key aim of conducting this study is to inspect the dynamic spillover connectedness between the four leading precious metals (such as Gold, Palladium, Platinum, and Silver) and seven major currency markets (including Euro, British Pound, Australian Dollar, Swiss Franc, Japanese Yen, Canadian Dollar, and Chinese Yuan). The study includes the dataset from 24 January 2022–31 May 2022 to cover the inflationary period. Accordingly, the Time-Varying Parameter Vector Autoregression framework is applied. Granger linear causality and BDS nonlinear causality techniques are also employed to examine the causal effect of geopolitical risk in aforementioned connectedness. The findings reveal that Platinum has a strong spillover towards all the considered currencies except the Japanese Yen. The increasing demand for Platinum during the conflict secured it to receive the spillover. While the Japanese Yen is a net transmitter of spillover indicating the Japanese Yen as sturdiest currency during the conflict. The causality test reveals that geopolitical risk causes spillover connectedness across the precious metals and the currency markets during inflationary period. This study is significant for policymakers, investors, and portfolio managers while developing strategies or making critical investment decisions.

FRAM-based causal analysis and barrier measures to mitigate dust explosions: A case study.

Both the number of dust explosion accidents and the resulting number of casualties have increased dramatically in recent years. To reduce this risk of dust explosions, we use the functional resonance analysis method (FRAM) to analyze the cause of the dust explosion accident at the Kunshan factory and propose barrier measures to prevent such accidents. The functional units that changed in the production system during the accident and how these functional units coupled to eventually cause the dust explosion were examined and explained. In addition, barrier measures were developed for functional units that changed during production and emergency systems defined to block the propagation of changes between functions and prevent resonance. Through case study, the identification of key functional parameters in both triggering the initial explosion and in then allowing its spread are key to define barriers to prevent a recurrence of such an event. FRAM uses system function coupling instead of traditional linear causality to explain the accident process, and develops barrier measures for changing function units, providing a novel thinking strategy and method for the analysis of accidents and their prevention.

The nonlinear nexus between renewable energy consumption and economic growth in OECD countries: evidence from PTR and PSTR estimates

PurposeToday, the increasing use of fossil fuels, energy security, concerns and the great importance of achieving sustainable economic growth underscore the urgent need to transition to a green energy system as soon as possible. To shed light on the relationship between the economy and renewable energy, this study assesses the nonlinear relationship between renewable energy consumption and economic growth for 24 OECD countries between 1990 and 2015.Design/methodology/approachThe authors apply two nonlinear models: panel threshold regression (PTR) and panel smooth transition regression (PSTR).FindingsThe results show that the positive effect of renewable energy consumption on economic growth is conditional. On the one hand, the results of the nonlinear PTR model yielded a threshold value for renewable energy consumption of about 251.17. Below this threshold, the authors find a negative impact of renewable energy consumption on economic growth. However, above this threshold, renewable energy consumption becomes a favorable source of economic growth. Using the nonlinear PSTR model based on the gamma transition parameter of 2.014, the transition from low renewable energy consumption regime to higher is abrupt.Originality/valueReferring to previous studies analyzing linear causality between renewable energy and economic growth, most of the results show various mixed and non-stable effects over the study period. The contributions of this study consist in conduct a series of empirical tests of the nonlinear effects of renewable energy use on economic growth using two nonlinear approaches such as the PTR and PSTR models. If the authors show that such a relationship is nonlinear, it is essential to check whether the transition from one weak regime to another strong regime is abrupt or smooth, using the PSTR approach.

Linear and Nonlinear Relationship Between Real Exchange Rate, Real Interest Rate and Consumer Price Index: An Empirical Application for Countries with Different Levels of Development

The research population of this study consists of Australia, Azerbaijan, Egypt, Brazil, Chile, Canada, Hungary, Pakistan, India, Ukraine and the United Kingdom. For these countries; T, the relationship between Exchange Rate Index (exc), Real Interest Rate (int) and Consumer Price Index (cpi) variables were examined. Data from 2000Q1 to 2021Q3 were used in the study. The data are taken from the IMF's data bank. Analysis was done in R-Studio. Wo Seasonality Test, Augmented Dickey-Fuller Test, Linear Granger Causality Analysis and Nonlinear Granger Causality Analysis were used to investigate the relationship between variables. The theory claims that there is causality in both directions between exchange rate, interest rate and inflation. In the study, the relationship between these variables was investigated with linear and nonlinear causality tests. It is thought that the empirical results that contradict the theory are caused by the development levels of the countries, their macroeconomic structures, the applied fiscal and monetary policy instruments, the conjuncture and the analysis methods. The study aims to investigate these claims. For this reason, the development levels, sociocultural and socioeconomic structures of the selected countries were requested to be different. In addition, two different test methods, linear and non-linear, were preferred for the causality relationship. It was observed that the selected analysis methods significantly affected the results. Linear causality analysis results are closer to theoretical implications. However, the level of development of the countries does not have a significant effect on the relationship between the variables.

Causal relationships of work environment, job satisfaction, burnout, and turnover intention among workers at shelters for the abused children

연구목적: 본 연구목적은 학대피해아동쉼터 종사자가 인식하는 근무환경, 직무만족, 소진, 이직의도가 종사자 특성별로 차이가 있는지, 근무환경이 직무만족, 소진, 이직의도에 영향을 미치는지, 그리고 근무환경, 직무만족, 소진, 이직의도가 어떤 인과구조를 구성하는지를규명하려는 것이다. 방법: 연구 대상은 학대피해아동쉼터에 근무하는 종사자이며 총 281명이 온라인 조사에참여하였다. 기초통계분석, 회귀분석, 구조방정식을 활용하였다. 결과: 쉼터 종사자의 소진은 다른 시설 종사자에 비해 높게 나타났다. 종사자 인식 수준에가장 큰 차이를 만들어내는 특성은 직책이었다. 시설장이 근무환경을 가장 나쁘게 인식하였다. 임상심리치료사의 직무만족도가 가장 높았으나, 보육사는 소진과 이직의도 수준이 가장높았다. 쉼터 근무환경은 직무만족, 소진, 이직의도에 유의한 영향을 미치는 것으로 나타났다. 구조방정식 분석 결과, 근무환경, 직무만족, 소진, 이직의도 사이에 일직선상의 인과구조가 확인되었으며, 직무만족과 소진의 매개효과가 검증되었다. 결론: 쉼터 종사자의 소진과 이직을 예방하기 위해서 업무량 및 직무스트레스 개선, 클라이언트 공격성에 대한 대처방안 마련, 인력보강, 교대제 개선, 업무량 및 근무시간 축소 등을제시하였다.Objectives: The main objectives of this study are to examine (1) whether there are differences in the work environment, job satisfaction, burnout, and turnover intention perceived by workers at shelters for abused children, (2) to what extent job environment affect job satisfaction, burnout, and turnover intention, and (3) the causality structure among the four main variables. Methods: A total of 281 shelter workers participated in the online survey. This study used descriptive statistics, multiple regression analysis, and structural equation modeling. Results: Position made the most prominent differences among the workers in their perceptions regarding their work. The manager perceived the work environment unfavorably, whereas the psycho-therapist had the highest job satisfaction. Meanwhile, the care worker had the highest burnout and turnover intention. The work environment of the shelter was significantly associated with job satisfaction, burnout, and turnover intention of the workers. The SEM analysis found a linear causality among work environment, job satisfaction, burnout, and turnover intention and the mediating effects of job satisfaction and burnout in these causal relationships. Conclusions: This study proposed that the most urgent agenda is to reform the work environment to lessen turnover intention. In particular, hiring more shelter workers can mitigate both heavy workloads and long working hours.

Abyssal geography†

Today, we are held to live in the Anthropocene, bringing to an end modern binary imaginaries, such as the separation between Human and Nature, and with them Western assumptions of progress, linear causality and human exceptionalism. Much Western critical theory, from new or vital materialism to post‐ and more‐than‐human thinking, unsurprisingly reflects this internal crisis of faith in Eurocentric or Enlightenment reasoning. At the same time, a radically different critique of modernity has gained prominence in recent years, emerging from critical Black studies, which places the Caribbean at the centre of the development of a new and distinct mode of critical thought. In attempting to grasp the ways in which Caribbean thought and practice have been seen to enable a distinctive alternative non‐Eurocentric imaginary, this paper heuristically sets out a paradigmatic framing of ‘abyssal geography’. We emphasize two key points. The first is that abyssal thought is not grounded in abstract and timeless philosophical assumptions but figuratively draws upon aspects of Caribbean practices of resistance and survival, for example, from the Middle Passage, Plantation, carnival, creolization, dance forms and speculative fiction. The second is that abyssal work engages the legacies of modernity and coloniality by explicitly seeking to question the lure of ontology: seeking to disrupt, suspend and to problematize the modern project of the human and the world.

Some Epistemological and Ontological Reflections on Concept of Causality: From Scientific Causality to Contextual Causality

This research tries to present a critical analysis of the concept of scientific causality and the problems it entails within the scientific domain. This study claims that scientific causality is not enough to understand the nature of relationships existing among the members of a chain and it is concerned with the possible action of correspondence apart from the context of action. It is argued here that all types of scientific causality fail to reflect the flexible nature of members of any possible correlation. This paper offers the concept "contextual causality" as a possible alternative perspective that reflects both the variable and elastic nature of the elements of correlation and discusses the relationship between the context and the process of correlation. The introduction of the concept of contextual causality raises new metaphysical and epistemological issues that can be solved from the perspective of structural idealism. 
 Keyword: Causality, Contextualism, Structuralism, Structural Idealism, Linear Causality, Epistemology.

Idealist Individualism or Indigenous Cosmology; Finding Entanglement across Species and Strata

Science and technology have been associated with modern Enlightenment, in a manner that elevated the rational mind over emotions and the body, a separation of the subjective mind from the object of observation, universal categories, objective observation, and linear causality. These assumptions, consolidated by Descartes and then Kant, have underpinned the philosophies of science, economics, policy, and political theory. They have shaped the modern world and enabled corporate freedom to exploit all ‘resources’ in the name of consumerism and global trade. Idealism has alienated subjective rationality from an idealised universal created world. In contrast, ancient indigenous ways of knowing are emerging as better exemplars of the interrelationship between individuals, communities, and organic and anorganic life forms. Celtic shapeshifters and praise poems forge an interwoven dance of geology, weather, plants, animals, and humanity with wisdom and politics. The Māori concept of whakapapa is the kin relations of everything, tied into complex claves as a taxonomy of familial ties. Animism was understood as pagan misidentification by modernity, but if the alienation set out by modern linear physics is severed, then the intra and inter-relationship of strata, atmosphere, ocean, and species are better relayed by indigenous philosophy than by outdated, colonial, modern assumptions. Celtic and Māori pantheism show us how entangled we are, and how special relationships are in place that last across generations.

The causality relationship between foreign direct investment and economic growth in RCEP countries

PurposeThe direction of the causality relationship between Foreign Direct Investment (FDI) and economic growth is a highly controversial issue in the literature. There are two basic approaches advocating different causal directions between FDI and growth, which are called hypotheses of FDI-led Growth and Growth-led FDI. The aim of this study is to analyze the causality relationship between FDI and economic growth in RCEP countries and thus make a new contribution to the discussions in the relevant literature. In addition, the results of the study are expected to provide important implications for the policies to be designed for economic growth based on FDI flows to RCEP countries. Thus, by examining the direction of causality between FDI and economic growth in RCEP countries, we aim to provide a new contribution to related literature and make some implications for the policy design process of economic growth in the RCEP area.Design/methodology/approachWe empirically examined the direction of a causal link between FDI and economic growth in the context of Regional Comprehensive Economic Partnership (RPEC) countries in order to test the hypothesis of FDI-led growth and Growth-led FDI. Accordingly, as our main variables of interest, we incorporated the inward foreign direct investment stock to gross domestic product ratio (FDI) and gross domestic product per capita (GDP). Hatemi-J (2012) asymmetric causality test has been employed in the investigation of the direction of causality between FDI and GDP over the period of 1980–2020. Thus, unlike most of the studies investigating the direction of causality between FDI and growth using the linear causality analysis method, our study performed a nonlinear causality analysis.FindingsEmpirical results reveal that the causal relationship between FDI and national income in RPEC countries is non-linear or asymmetric . The results of the symmetric causality test for both from FDI to national income and from national income to FDI are statistically insignificant for all countries. Therefore, this finding obtained from the study provided an important guide to the econometric methods to be used in other studies to be conducted in the same region in the future. Concerning the asymmetric causality relationship from FDI to growth, positive FDI shocks are an important cause of national income in most RCEP countries. However, the effect of negative FDI shocks on national income is quite weak compared to positive shocks. Regarding the asymmetric causality relationship from growth to FDI, positive national income shocks do not create a significant causal relationship with FDI. Similarly, the effects of negative national income shocks on FDI are statistically insignificant. Overall, asymmetric causality test results reveal that positive FDI shocks have an important causal impact on economic growth in most RCEP countries. Thus, the results of econometric analysis mostly support the argument that the FDI-led growth hypothesis rather than the Growth-led FDI hypothesis in RCEP countries. Accordingly, policy-makers in most of the RCEP countries should continue to provide more incentives and facilities to multinational companies in order to ensure constant economic growth.Originality/valueOur study brings a significant difference in the econometric method used compared to most of the other studies in the literature. Existing empirical studies on the direction of causality between FDI and growth mostly use standard Granger-linear causality-type tests to detect the direction of causality among FDI and growth. Unlike most of the studies in the literature, our study adopted a different methodological approach, namely the Hatemi J test to detect the non-linear causality between FDI and economic growth in RCEP countries. Therefore, this paper made a new methodological contribution significantly to the literature focusing on the causal relationship between FDI and economic growth by using a non-linear causality method rather than a linear causality one.

Beyond the Penrose Hypothesis: Examining the Association between the Availability of Psychiatric Care and National Homicide Rates in 166 Countries

The association between mental illness and violent crimes such as homicide is complex. In 1939, Lionel Penrose hypothesized that the availability of psychiatric hospital beds was inversely related to the prison population, presumably due to the hospitalization of potential offenders with a mental illness. Subsequent studies have found evidence for this association, but questions remain about the contributions of confounding factors. Moreover, there has been a move towards deinstitutionalization and community care of the mentally ill over the past six decades. In this study, the association between national homicide rates and three measures of the availability of psychiatric care—the numbers of psychiatrists, general hospital psychiatric beds, and psychiatric hospital beds per 100,000 population—was examined using a time-lagged correlation analysis. Associations between homicide rates and socioeconomic factors associated with crime were also examined. It was found that the availability of psychiatrists and of general hospital psychiatric beds were both negatively correlated with homicide rates, and that the association with general hospital psychiatric beds remained significant even after correction for confounding factors. These results suggest the need for a more nuanced interpretation of Penrose’s original formulation, involving the interplay of social, economic factors and psychological factors rather than linear causality.

Identifying causality drivers and deriving governing equations of nonlinear complex systems.

Identifying and describing the dynamics of complex systems is a central challenge in various areas of science, such as physics, finance, or climatology. While machine learning algorithms are increasingly overtaking traditional approaches, their inner workings and, thus, the drivers of causality remain elusive. In this paper, we analyze the causal structure of chaotic systems using Fourier transform surrogates and three different inference techniques: While we confirm that Granger causality is exclusively able to detect linear causality, transfer entropy and convergent cross-mapping indicate that causality is determined to a significant extent by nonlinear properties. For the Lorenz and Halvorsen systems, we find that their contribution is independent of the strength of the nonlinear coupling. Furthermore, we show that a simple rationale and calibration algorithm are sufficient to extract the governing equations directly from the causal structure of the data. Finally, we illustrate the applicability of the framework to real-world dynamical systems using financial data before and after the COVID-19 outbreak. It turns out that the pandemic triggered a fundamental rupture in the world economy, which is reflected in the causal structure and the resulting equations.

House price information flows among some major Chinese cities: linear and nonlinear causality in time and frequency domains

PurposeWith the rapid-growing house market in the past decade, the purpose of this paper is to study the important issue of house price information flows among 12 major cities in China, including Shanghai, Beijing, Xiamen, Shenzhen, Guangzhou, Hangzhou, Ningbo, Nanjing, Zhuhai, Fuzhou, Suzhou and Dongguan, during the period of June 2010 to May 2019.Design/methodology/approachThe authors approach this issue in both time and frequency domains, latter of which is facilitated through wavelet analysis and by exploring both linear and nonlinear causality under the vector autoregressive framework.FindingsThe main findings are threefold. First, in the long run of the time domain and for timescales beyond 16 months of the frequency domain, house prices of all cities significantly affect each other. For timescales up to 16 months, linear causality is weaker and is most often identified for the scale of four to eight months. Second, while nonlinear causality is seldom determined in the time domain and is never found for timescales up to four months, it is identified for scales beyond four months and particularly for those beyond 32 months. Third, nonlinear causality found in the frequency domain is partly explained by the volatility spillover effect.Originality/valueResults here should be of use to policymakers in certain policy analysis.

Effects of Temperature Rise on Clean Energy-Based Capital Market Investments: Neural Network-Based Granger Causality Analysis

During the past 20 years, due to climate change, the government and the private sector have significantly focused on relying on non-fossil fuel-based methods for their energy needs. Climate change-related events, such as unusual weather conditions, abnormal temperature spikes, etc., have an adverse influence on clean energy-based investments. In the given study, we intend to focus on how an incremental temperature rise could affect investors’ perceptions of clean energy assets. To understand the investor-based sentiment on climate change, we utilize prominent clean energy ETFs (exchange traded funds) and consider the temperature’s effect on them. The daily average temperatures of the three most dynamic international financial centers: New York, London and Tokyo, are taken as predictors. Deep learning-based neural networks are applied to understand both the linear and non-linear relationships between the desired variables and identify the causal effects. The results indicate that in almost all the cases with desired lags, there is some sort of non-linear causality, irrespective of linear causality effects. We hope this occurrence can help portfolio managers and environmental professionals in identifying novel climate change-related factors when considering the temperature-related risks.

Stability and causality of Carter’s multifluid theory

Stability and causality are studied for linear perturbations about equilibrium in Carter’s multifluid theory. Our stability analysis is grounded on the requirement that the entropy of the multifluid, plus that of the environment, must be maximised at equilibrium. This allows us to compute a quadratic Lyapunov functional, whose positive definiteness implies stability. Furthermore, we verify explicitly that, also for multifluids, thermodynamic stability implies linear causality. As a notable stability condition, we find that the entrainment matrix must always be positive definite, confirming a widespread intuition.

The outbreak of COVID-19 and stock market liquidity: Evidence from emerging and developed equity markets

The outbreak of the novel corona virus has heightened concerns surrounding the adverse financial effects of the outbreak on stock market liquidity and economic policies. This paper contributes to the emerging strand of studies examining the adverse effects of the virus on varied aspect of global markets. The paper examines the causality and co-movements between COVID-19 and the aggregate stock market liquidity of China, Australia and the G7 countries (Canada, France, Italy, Japan, Germany, the UK and the US), using daily three liquidity proxies (Amihud, Spread and Traded Value) over the period December 2019 to July 2020. Our empirical analysis encompasses wavelet coherence and phase-differences as well as a linear Granger causality test. Linear causality test results suggest that a causal relationship exists between the number of cases of COVID 19 infections and stock market liquidity. To quantitatively examine the degree of causality between COVID-19 outbreak and stock market liquidity, we employ the continuous wavelet coherence approach with results revealing the unprecedented impact of COVID-19 on stock market liquidity during the low frequency bands for countries that were hard hit with the COVID-19 outbreak, i.e., Italy, Germany, France, the UK and the US. Further, evidence shows that there is a heterogeneous lead-lag nexus across scales for the entire period of the study.