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Econometrics (from the Greek for, ‘budget-measurement technique’) is mathematical and computer skills applied to economics. The econometrician\'s best-known activity is building mathematical ‘models’ of the relationships in the economy, using equations that embody those relationships between, for example, investment, interest rates and economic growth. Once built, the model can be used (with a computer) to forecast the economic future.
Econometrics clearly has a valuable role to play in quantifying economic relationships; a computer can now handle such quantities of data that econometric analysis has become practical and accessible. However, it does have its critics. The economist Joan Robinson of Cambridge University put it this way: ‘I don\'t know any mathematics. I have to think.’ Unless econometric seeds are sown on soil that has been thoroughly and thoughtfully prepared, they will provide information and conclusions lacking coherence and relevance. TF
See also game theory. |
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