The Limits of EconometricsEconometric issues have provoked a lively and sometimes adversarial debate in the economics profession. The excitement and intellectual vitality of that debate is captured here for the reader in a lucid overview of econometric approaches, describing their advantages and limitations. This ambitious book focuses on the underlying methodological issues rather than concentrating upon econometric techniques. The limits of econometric investigations are identified through a critical appraisal of three different approaches associated with the work of Professors Hendry, Leamer and Sims. After explaining why the early optimism in econometrics was misplaced, it argues that rejection is not an appropriate response. It offers a rich spectrum of approaches to a problem of central importance in the development of modern economics. The book will appeal not only to all econometricians whatever their persuasion but also to all those with an interest in the methodology of economics. |
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... prior probabilities of the hypotheses per se12 and also of the parameters associated with each hypothesis . If we denote the parameters associated with hypothesis i as 0 , and the associated prior by f ( 9 . ) , then the Bayes factor ...
... prior to posterior distribution ' ( p . 124 ) . Because 1 above is not possible , an interpretive search is carried out which involves the fitting and refitting of many equations - ' one of perhaps hundreds of equations is selected and ...
... prior ; indeed , the whole point of this exercise is to examine the sensitivity of inferences to changes in priors.20 In this conceptual framework the EBA investigator partitions the candidate regressors into ' free ' and ' doubtful ...
Contents
ECONOMICS DATA AND PROBABILITY | 3 |
Subjective probability | 10 |
The interpretation of the error as a white noise term | 18 |
Copyright | |
14 other sections not shown