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Putting Econometrics in its Place

Putting Econometrics in its Place

Putting Econometrics in its Place, Edward Elgar Publishing, 2006. Link to page on Elgar website

In empirical work, the economics profession seems preoccupied with econometrics above all else.  Some econometrcians seem to care more about demonstrating their econometric sophistication than making advances in economic understanding.  This is an unsatisfactory state of affairs.  The book argued that econometrics is not, and can never be, a 'universal solvent' for all problems in applied economics.  The reason for that is the pervasive signal-to-noise-ratio problem in econometrics, which is discussed in more detail here.  The book stresses that researchers with a genuine interest in applied economics must use a very wide range of research approaches in their applied work.  In addition to econometrics, this will include (inter alia): engineering economics, simulation, economic history, the history of economic thought, case studies, interviews, questionnaire surveys, intuition, metaphor, and, finally, innovative economics - an essential miscellany of research teachniques.  I am clear that we can learn far more by combining these other approaches with some simple econometric analysis, than from econometrics alone - however sophisticated that econometrics may be.

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