Econometrics and truth

Abstract

Many people think that econometrics is not the most exciting of subjects. They are more interested in the results of an econometric analysis than in the means and ways of obtaining them Many people have a distrust of econometric analyses. I am not sure whether this has arisen from the failure of the extravagant expectations of the sixties or the seventies or from a basic misunderstanding of the probabilistic nature of the subject itself. Many will offer the excuse that the data are not good enough to support elaborate estimation techniques, complex models or rigorous techniques. The simple answer is that a solution to these problems demands the use of elaborate techniques. The availability of cheap powerful computer facilities has not only made this methodology available to a large number of users but has also acted as catalyst for its further development.