Given two time series, can one faithfully tell, in a rigorous and quantitative way, the cause and effect between them? Based on a recently rigorized physical notion, namely, information flow, we solve an inverse problem and give this important and challenging question, which is of interest in a wide variety of disciplines, a positive answer. Here causality is measured by the time rate of information flowing from one series to the other. The resulting formula is tight in form, involving only commonly used statistics, namely, sample covariances; an immediate corollary is that causation implies correlation, but correlation does not imply causation. It has been validated with touchstone linear and nonlinear series, purportedly generated with one-way causality that evades the traditional approaches. It has also been applied successfully to the investigation of real-world problems; an example presented here is the cause-and-effect relation between the two climate modes, El Niño and the Indian Ocean Dipole (IOD), which have been linked to hazards in far-flung regions of the globe. In general, the two modes are mutually causal, but the causality is asymmetric: El Niño tends to stabilize IOD, while IOD functions to make El Niño more uncertain. To El Niño, the information flowing from IOD manifests itself as a propagation of uncertainty from the Indian Ocean.

Information flow or information transfer the widely applicable general physics notion can be rigorously derived from first principles, rather than axiomatically proposed as an ansatz. Its logical association with causality is firmly rooted in the dynamical system that lies beneath. The principle of nil causality that reads, an event is not causal to another if the evolution of the latter is independent of the former, which transfer entropy analysis and Granger causality test fail to verify in many situations, turns out to be a proven theorem here. Established in this study are the information flows among the components of time-discrete mappings and time-continuous dynamical systems, both deterministic and stochastic. They have been obtained explicitly in closed form, and put to applications with the benchmark systems such as the Kaplan-Yorke map, Rössler system, baker transformation, Hénon map, and stochastic potential flow. Besides unraveling the causal relations as expected from the respective systems, some of the applications show that the information flow structure underlying a complex trajectory pattern could be tractable. For linear systems, the resulting remarkably concise formula asserts analytically that causation implies correlation, while correlation does not imply causation, providing a mathematical basis for the long-standing philosophical debate over causation versus correlation.

Recently, a rigorous yet concise formula was derived to evaluate information flow, and hence the causality in a quantitative sense, between time series. To assess the importance of a resulting causality, it needs to be normalized. The normalization is achieved through distinguishing a Lyapunov exponent-like, one-dimensional phase-space stretching rate and a noise-to-signal ratio from the rate of information flow in the balance of the marginal entropy evolution of the flow recipient. It is verified with autoregressive models and applied to a real financial analysis problem. An unusually strong one-way causality is identified from IBM (International Business Machines Corporation) to GE (General Electric Company) in their early era, revealing to us an old story, which has almost faded into oblivion, about “Seven Dwarfs” competing with a giant for the mainframe computer market.

Causality analysis is an important problem lying at the heart of science, and is of particular importance in data science and machine learning. An endeavor during the past 16 years viewing causality as a real physical notion so as to formulate it from first principles, however, seems to have gone unnoticed. This study introduces to the community this line of work, with a long-due generalization of the information flow-based bivariate time series causal inference to multivariate series, based on the recent advance in theoretical development. The resulting formula is transparent, and can be implemented as a computationally very efficient algorithm for application. It can be normalized and tested for statistical significance. Different from the previous work along this line where only information flows are estimated, here an algorithm is also implemented to quantify the influence of a unit to itself. While this forms a challenge in some causal inferences, here it comes naturally, and hence the identification of self-loops in a causal graph is fulfilled automatically as the causalities along edges are inferred. To demonstrate the power of the approach, presented here are two applications in extreme situations. The first is a network of multivariate processes buried in heavy noises (with the noise-to-signal ratio exceeding 100), and the second a network with nearly synchronized chaotic oscillators. In both graphs, confounding processes exist. While it seems to be a challenge to reconstruct from given series these causal graphs, an easy application of the algorithm immediately reveals the desideratum. Particularly, the confounding processes have been accurately differentiated. Considering the surge of interest in the community, this study is very timely.

Arctic sea ice has substantially changed over the past four decades, with a large decrease in sea‐ice area and volume. The exact causes of these changes are not entirely known. In our study, we make use of the Swedish Meteorological and Hydrological Institute Large Ensemble. This ensemble consists of 50 members realized with the EC‐Earth3 global climate model and covers the period 1970‐2100. We apply for the first time the Liang‐Kleeman information flow method to analyze the cause‐effect relationships between Arctic sea ice and its potential drivers. We show that recent and future changes in Arctic sea ice are mainly driven by air and sea‐surface temperatures and ocean heat transport. Conversely, changes in Arctic sea ice also considerably impact temperature and ocean heat transport. Finally, we find a progressive decrease in the influence of sea‐ice area and volume on air temperature and ocean heat transport through the twenty‐first century.

Information flow, or information transfer as it may be referred to, is a fundamental notion in general physics which has wide applications in scientific disciplines. Recently, a rigorous formalism has been established with respect to both deterministic and stochastic systems, with flow measures explicitly obtained. These measures possess some important properties, among which is flow or transfer asymmetry. The formalism has been validated and put to application with a variety of benchmark systems, such as the baker transformation, Hénon map, truncated Burgers-Hopf system, Langevin equation, etc. In the chaotic Burgers-Hopf system, all the transfers, save for one, are essentially zero, indicating that the processes underlying a dynamical phenomenon, albeit complex, could be simple. (Truth is simple.) In the Langevin equation case, it is found that there could be no information flowing from one certain time series to another series, though the two are highly correlated. Information flow/transfer provides a potential measure of the cause–effect relation between dynamical events, a relation usually hidden behind the correlation in a traditional sense.