What is Econometrics
When you know econometrics, you are able to translate data into models to make forecasts and to support decision making in a wide variety of fields, ranging from macroeconomics to finance and marketing.
Econometrics is the application of mathematical and statistical methods to describe economic systems.
It also involves using mathematical and statistical theories to test hypotheses and predict future trends. It uses mathematics, statistical inference, and economic theory to quantify economic phenomena.
Economists say that econometrics turns theoretical economic models into tools that lawmakers, i.e., policymakers, can use for policymaking.
Econometrics converts qualitative statements into quantitative statements. Let’s look, for example, at the qualitative statement: ‘’The relationship between two variables is positive.’’ Econometrics converts it to: ‘’Consumer spending rises by 90 cents for ever single dollar increase in disposable income.’’
Econometricians convert models that economic theorists developed into versions with which we can make estimates.
Source: Market Business News