I.1 WHAT IS ECONOMETRICS?
Literally interpreted, econometrics means "economic measurement." Although measurement is an important part of econometrics, the scope of econometrics is much broader, as can be seen from the following quotations:
Econometrics, the result of a certain outlook on the role of economics, consists of the application of mathematical statistics to economic data to lend empirical support to the models constructed by mathematical economics and to obtain numerical results.1
. . . econometrics may be defined as the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference.2
Econometrics may be defined as the social science in which the tools of economic theory, mathematics, and statistical inference are applied to the analysis of economic phenomena.3
Econometrics is concerned with the empirical determination of economic laws.4
1Gerhard Tintner, Methodology of Mathematical Economics and Econometrics, The University of Chicago Press, Chicago, 1968, p. 74.
2P. A. Samuelson, T. C. Koopmans, and J. R. N. Stone, "Report of the Evaluative Committee for Econometrica," Econometrica, vol. 22, no. 2, April 1954, pp. 141-146.
3Arthur S. Goldberger, Econometric Theory, John Wiley & Sons, New York, 1964, p. 1.
4H. Theil, Principles of Econometrics, John Wiley & Sons, New York, 1971, p. 1.
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