This chapter emphasizes that an econometrician has to be a competent mathematician and statistician who is an economist by training. It is the unification of statistics, economic theory and mathematics that constitutes econometrics. Each view point, by itself is necessary but not sufficient for a real understanding of quantitative relations in modern economic life, see Frisch (1933).
Econometrics aims at giving empirical content to economic relationships. The three key ingredients are economic theory, economic data, and statistical methods. Neither ‘theory without measurement’, nor ‘measurement without theory’ are sufficient for explaining economic phenomena. It is as Frisch emphasized their union that is the key for success in the future development of econometrics.
Econometrics p...Read More