Bring together statistics, mathematics and economía It has never been easier thanks to econometrics. Today we tell you what it is and what it can be used for or what it can be used for.
Econometrics is the branch of economics that studies (from mathematical and statistical models, game theory, ...) the interpretation and analysis of certain economic phenomena, predicting essential variables for this to occur (as is the case of the price, costes, or consequences of economic policies).
So, in order to understand econometric models, it would be necessary for the individual to have both knowledge of economics and extensive knowledge of statistics. You have to know what you are doing and based on what possible results can be achieved.
In order to use econometrics, the economist must initially propose a model of a theory that he wishes to test. Thanks to econometrics (using statistical and mathematical techniques) it will be tested whether the model certainly yields results that are very distant from real life. That is, you can check the validity of the economic model you want.
If the model is viable, it could be used to justify subsequent events or events in a country or in an economic setting.
In this way, the past event will be eliminated or will try to correct as precisely as possible trying to implement new economic policies or strategies that are truly useful and that do work. Econometrics, as we have said, will help us to forecast the most accurate actions for a given country.
Among the possible guidelines that we can draw from econometrics we find:
- Statement of hypotheses
- Specification of a mathematical model
- Specification of an econometric model
- Prediction of certain actions in the future
- Formulation and testing of economic hypotheses
- Data collection
- Application of the model
- Estimation of parameters of the econometric model