Using the Sign Rule

Abstract

The "sign rule" for drawing implications from static theories is not always valid if the theory contains loops of reciprocal causation between variables. However, if the theory is the stable equilibrium of an underlying dynamic model and if it contains only positive or only negative loops, then the sign rule can freely be used to predict the relation between any pair of independent and dependent variables. The sign rule is not in general valid when a theory contains interseting positive (potentially explosive) and negative (dampening) causal loops.