Econometrics: Alchemy or Science?

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Econometrics: Alchemy or Science?

This is a collection of my main essays on econometric methodology from the period 1974– 85 during which the approach developed into its present form, integrated by a commentary on the motivations, personalities and ideas central to its formalization. Sue Corbett of Blackwell Publishers initiated the idea of drawing together the main steps through which the methodology had evolved,since a developmental viewpoint can be clarifying.Inparticular,an importantpartoftheexplanationforwhyagivenmethodologytakesitscurrentformarethesuccessesandfailuresof its earlier incarnations. As each study reproduced below was undertaken, new issues and problems were highlighted, stimulating further developments and leading me to discard aspects of previous approaches as inadequate. Indeed, that process has continued unabated, so the story is still progressing, outdating some of the themes and interpretations discussed herein,butfortunatelynotthehistoricalsequence.Theideasdiscussedbelowarenowsufficientlydeveloped, interrelated and formalized to allow an integrated treatment, and the outcome is the present volume.
Five criteria were used to select the included papers from the 40 that I published during 1971– 85: their importance in the evolution of the methodology; their role in the continuity of the exposition; their focus on methodology; the subject matter of their empirical application;and the accessibility or other wise of the original publication to economists world-wide. The first and third criteria eliminated technical papers on econometric theory, estimation methods (other than the synthesis in chapter 13) and Monte Carlo techniques (except for the second half of chapter 7). Conversely, despite their being accessible, eight papers from international econometrics journals were included because of their central role and the needs of continuity. Given an overall length restriction, the fourth criterion induced the arbitrary choice of including studies of consumers' expenditure and money demand but excluding most of my empirical papers on housing and credit markets, despite the fact that the latter came high on the fifth criterion. The second and fifth criteria then led to the choice of most of the remaining chapters, except for the Postscript which extends the horizon to 1989.

Statement of Responsibility

Author(s)

David F. Hendry - Personal Name

Edition

1st Edtion

Call Number

ISBN/ISSN

0-19-829354-2

Subject(s)