BASIC ECONOMETRICS

INTRODUCTION

           The term Econometrics was first introduced by RAGNAR FRISH and he was one of the founder of econometrics society. Econometrics means economics measurement and measurement is very important elements of econometrics.

DEFINITION

         

                 According to  GOLD BERGER  " Econometrics may be defined as the social science in which the tools of economics theory mathematics and statistical infurence are applied to the analysis of economic phenomenon " .

                 According to KOUTSOYIANNIS " Econometrics is the combination f economic theory, mathematical economics and statistics. But it is completely distinct from each one of the three branches of science. Econometrics may be considered as the integration of economics mathematics and statistics for the purpose of providing numerical values for the parameters of economic relationship and verifying economic theories . It is a special type of economic analysis and researches. In which the general economic theory formulated in mathematical terms is combined with empirical measurement of economic phenomenon

DIVISION OF ECONOMETRICS

                 There are tree division in econometrics they are:

                                   1. Economic theory

                                   2. Mathematical Economics

                                   3. Statistical Economics.

  

1.ECONOMIC THEORY

                          Economic theory market statements or hypothesis that are qualitative or verbal exposition in nature. That is law of demand best economic theory it self does not provide any numerical measures of the relation ship between the variables. It expresses various relationship in an exact form it does not provide and empirical verification of economics of variables are non stochastic.

2.MATHEMATICAL ECONOMICS

                         In Mathematical economics the main concern of mathematical economists is to express economic theory in mathematical form (Equation) with out regarded to measurability are empirical verification of theory mathematical economics assumes that economic relationship is exact like economic theory . Neither economics nor mathematics allow for random disturbance on the contrary econometrician is mainly interested in the empirical verification of economic theory.

3.STATISTICAL ECONOMICS :

                         Economics statistics is mainly concerned with collecting processing and presenting economic data. It is mainly descriptive aspects of economics including developing and refining data such as the national income accounts and index numbers economics statistics does not provide any measurement of the parameters of economic relationship.