However, exploration of such behaviour has also led to path breaking developments in econometrics. For example, most of the macroeconomic series have strong time trend and thus have strong correlation. Prima facie one may suspect the existence of spurious correlation. However, further exploration in such relationships led the foundation of the concept of cointegration.
If two variables have a common trend, then there could be a possibility of a long-run equilibrium relationship between them. This statistical finding opened up a new dimension of modern economics and CWJ Granger was awarded Nobel prize in economics for this in 2003. 18. Let me now give you an example from the banking world.