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Introduction:
What is
Econometrics?
Introduction
What is Econometrics?
Econometrics
Economic Mathematic
Statistics Statistics
Introduction
Why a separate discipline?
• Economic theory makes statements
that are mostly qualitative in nature,
while econometrics gives empirical
content to most economic theory
• Mathematical economics is to
express economic theory in mathematical
form without empirical verification of the
theory, while econometrics is mainly
interested in the later
Introduction
Why a separate discipline?
• Economic Statistics is mainly
concerned with collecting,
processing and presenting
economic data. It does not being
concerned with using the collected
data to test economic theories
• Mathematical statistics provides
many of tools for economic studies, but
econometrics supplies the later with many
special methods of quantitative analysis based
on economic data
Economic Mathematical
Theory Economics
Econometrics
Economic Mathematic
Statistics Statistics
Introduction
Methodology of
Econometrics
(1) Statement of theory or
hypothesis:
Y= Personal consumption
expenditure
X= Gross Domestic Product
all in Billion US Dollars
Introduction
Methodology of
Econometrics
(4) Obtaining Data
Year X Y
Estimation
Hypothesis Testing
Application
in control or
Forecasting policy
studies