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Oct 20, 2009


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Travis Greene

Despite the ever-present correlation/causation problem, the implications seem obvious.


Right - Does education cause higher GDP (proxy for wealth) or does wealth induce higher education?
By taking education 100 years ago, you circumvent the problem because nobody can argue that GDP today is at all causal of education 100 years ago. 100 years is a bit extreme, but since both variables are highly persistent (they don't change much through time) you need a big distance to get distance.

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