Reduced form models do a better job than structural models at identifying the direction of causation.

Name: Reduced form models do a better job than structural models at identifying the direction of causation.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Reduced form models are good at identifying correlations and making predictions based on observable variables, but they do not explicitly model the underlying causal mechanisms like structural models do, making them less effective at identifying the direction of causation.

Reduced Form Models Do a Better Job Than Structural Models