Econometrics and equilibrium models

In Rational Econometric Man, Edward Nell and Karim Errouaki present a welcome and timely case for the view that econometrics and econometric model-building may not be the magic tools to solve all empirical questions despite what many seem to have thought they were in the 1960s. Here I examine some p...

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Bibliographic Details
Published in:Review of political economy 2016-07, Vol.28 (3), p.438-447
Main Author: Boland, Lawrence A.
Format: Article
Language:English
Subjects:
Econometrics
Economic models
Equilibrium
parameters
probabilities
Textbooks
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Summary:In Rational Econometric Man, Edward Nell and Karim Errouaki present a welcome and timely case for the view that econometrics and econometric model-building may not be the magic tools to solve all empirical questions despite what many seem to have thought they were in the 1960s. Here I examine some possible problems with econometric models that have to do with their usually taking the form of equilibrium models. Some of these problems were recognized by Trygve Haavelmo decades ago. And as Aris Spanos has recently discussed, the problems are often the result of what we say in our textbooks. Some problems have to do with what we mean by econometric parameters and others with how we use probabilities.
ISSN:0953-8259
1465-3982
DOI:10.1080/09538259.2016.1154757