Econometrics: A Basic Guide

By Philip H Brown, Economist

Introduction

An economist collects, scours, and analyzes datasets in order to explain past and current trends and extrapolate future ones. The process of applying math and statistical modalities to these datasets to extract conclusions regarding economic relationships is called econometrics. The sub-discipline continues to evolve and is therefore founded on the understanding that the theory and observation driving econometric research are themselves in a developmental state.

Econometrics

Though the economic relationships quantified by the study of econometrics may themselves be simple, they are culled from large quantities of data that could prove impossible to interpret without the supportive formulas and theories. Econometrics marries economic theory with mathematics and statistics to allow economists to give empirical content to theories and turn those theories into practical tools for developing policies and making forecasts.

About the Author

Development economist Philip H. Brown has taught courses and published many book chapters and peer-reviewed papers on econometrics, development, and the Chinese economy. His work has appeared in publications such as the Journal of Development Economics, China Economic Review, and the Latin American Journal of Economics, among many others.