Description:
Contents: 1. The nature and evolution of econometrics -- 2. Components, functions and related disciplines -- 3. Econometrics as a science -- 4. The laws of economics and science -- 5. Econometric analysis: loopholes and shortcomings -- 6. Criticism of econometrics: Keynes, Leamer, Lucas and the Austrians -- 7. Stir-fry regressions as a con job -- 8. Cointegration analysis: principles and fallacies -- 9. Cointegration analysis: applications and illustrations -- 10. Sensitivity and insensitivity of empirical results -- 11. The forecasting fiasco -- 12. Concluding thoughts -- Index
Imad Moosa challenges convention with this comprehensive and compelling critique of econometrics, condemning the common practices of misapplied statistical methods in both economics and finance. After reviewing the Keynesian, Austrian and mainstream criticisms of econometrics, it is demonstrated that econometric models can be manipulated to produce any desired result. These hazardous analyses may then be relied upon to support flawed policy recommendations, ideological beliefs and private interests. Moosa proposes that the way forward should instead be to rely on clear thinking, intuition and common sense rather than to continue with the reliance upon econometrics. The mathematization of economics has limited the accessibility of and participation in economic discussion by converting the area into a complex 'science' when it should not be. Appealing to both academics and practitioners of economics and finance, this book serves to challenge the acceptance of econometrics as offering trustworthy analysis. Any individual interested in empirical work will find this book a captivating read on the limitations of econometrics