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Methodological Mistakes and Econometric Consequences

Year 2012, Volume: 4 Issue: 2, 99 - 122, 01.09.2012

Abstract

Econometric Methodology is based on logical positivist principles. Since logical positivism has collapsed, it is necessary to re-think these foundations. We show that positivist methodology has led econometricians to a meaningless search for patterns in the data. An alternative methodology which relates observed patterns to real causal structures is proposed.

References

  • Atiq-ur-Rahman, (2011). “Impact of Model Specification Decisions on Unit Root Tests,” International Econometric Review, 3(2), 22-33.
  • Ayer, A. J. (2008). interview with Brian Magee, www.youtube.com/watch?v=4cnRJGs08hE
  • Barzel, Y. (1972). “The rate of technical progress: The “Indianapolis 500” Journal of Economic Theory, 4(1), 72-81.
  • Freedman, D.A. (1997). From Association to Causation via Regression.In Causality in Crisis?ed. V. McKim and S. Turner.University of Notre Dame Press, South Bend, (with discussion) 113-82. Reprinted in Advances in Applied Mathematics, 18, 59-110.
  • Freedman, D. A (1991). “Statistical Models and Shoe Leather”. Sociological Methodology, 21, 291–313.
  • Freedman, D.A. (2008). On types of scientific enquiry: Nine success stories in medical research. In The Oxford Handbook of Political Methodology, ed. Janet M. Box-Steffensmeier, Henry E. Brady and David Collier. Oxford University Press, Oxford.
  • Freedman, D.A.; Pisani, R. and R. Purves (2007). Statistics. Norton, New York
  • Hendri, S.B. (2012), “Export Led Growth Hypothesis: An Analysis of Indonesia’s Trade Policy Pre and Post 1997 Financial Crises” Ph.D. Thesis submitted to IIIE, International Islamic University of Islamabad.
  • Hendry, D.F. (1993). The Roles of Economic Theory and Econometrics in Time-Series Economics. In European Econometric Society, Invited address, Stockholm.
  • Hoover, K. D. (2004). “Lost Causes” Journal of the History of Economic Thought, 26(2), 149- 164.
  • Hoover, K.D. (2005). “The Methodology of Econometrics”, article in Palgrave Handbooks of Econometrics, volume 1: Theoretical Econometrics.
  • Leamer, E. (1978). Specification Searches: Ad Hoc Inference with Non Experimental Data. John Wiley and Sons Inc., New York.
  • Leamer, E. (1983). “Lets take the con out of Econometrics”, The American Economic Review 73(1), 31-43.
  • Magnus, J.R. (1999). The success of econometrics. De Economist, 147(1), 50-58.
  • Manicas, P. (1987). History and Philosophy of the Social Sciences, Oxford: Basil Blackwell
  • Manicas, P. (2006). A Realist Philosophy of Social Science: Explanation and Understanding, Cambridge: Cambridge University Press
  • Oaksford, M. and Chater, N. (2007). Bayesian Rationality. Oxford: Oxford University Press
  • Russell, Bertrand. (1905). "On Denoting", Mind, 14, 479–493.
  • Sims, C.A. (1980). “Macroeconomics and Reality,” Econometrica 48, 1-48.
  • Frederick, S. (1977). The Structure of Scientific Theories 2nd edn. Chicago: University of Illinois Press
  • Thomas, R. L. (1993). Introductory Econometrics: Theory and Applications, 2 nd Edition Longman.
  • Van Fraassen, Bastiaan, C. (1980). The Scientific Image , New York: Oxford University Press
  • Wong, S. (2006). The Foundations of Samuelson’s Theory of Revealed Preference, Routledge,
  • Zaman, A. (1996). Statistical Foundations of Econometric Techniques, Academic Press. Zaman, A. (2008). Post Positivist http://ssrn.com/abstract=1319048 or http://dx.doi.org/10.2139/ssrn.1319048 Probability Available at SSRN:
  • Zaman, A. (2010). “Causal Relations via Econometrics”, International Econometrics Review, 2(1):36-56
  • Zaman, A. (2011). The Normative Foundations of Scarcity, to appear in Real World Economics Review, 60
Year 2012, Volume: 4 Issue: 2, 99 - 122, 01.09.2012

Abstract

References

  • Atiq-ur-Rahman, (2011). “Impact of Model Specification Decisions on Unit Root Tests,” International Econometric Review, 3(2), 22-33.
  • Ayer, A. J. (2008). interview with Brian Magee, www.youtube.com/watch?v=4cnRJGs08hE
  • Barzel, Y. (1972). “The rate of technical progress: The “Indianapolis 500” Journal of Economic Theory, 4(1), 72-81.
  • Freedman, D.A. (1997). From Association to Causation via Regression.In Causality in Crisis?ed. V. McKim and S. Turner.University of Notre Dame Press, South Bend, (with discussion) 113-82. Reprinted in Advances in Applied Mathematics, 18, 59-110.
  • Freedman, D. A (1991). “Statistical Models and Shoe Leather”. Sociological Methodology, 21, 291–313.
  • Freedman, D.A. (2008). On types of scientific enquiry: Nine success stories in medical research. In The Oxford Handbook of Political Methodology, ed. Janet M. Box-Steffensmeier, Henry E. Brady and David Collier. Oxford University Press, Oxford.
  • Freedman, D.A.; Pisani, R. and R. Purves (2007). Statistics. Norton, New York
  • Hendri, S.B. (2012), “Export Led Growth Hypothesis: An Analysis of Indonesia’s Trade Policy Pre and Post 1997 Financial Crises” Ph.D. Thesis submitted to IIIE, International Islamic University of Islamabad.
  • Hendry, D.F. (1993). The Roles of Economic Theory and Econometrics in Time-Series Economics. In European Econometric Society, Invited address, Stockholm.
  • Hoover, K. D. (2004). “Lost Causes” Journal of the History of Economic Thought, 26(2), 149- 164.
  • Hoover, K.D. (2005). “The Methodology of Econometrics”, article in Palgrave Handbooks of Econometrics, volume 1: Theoretical Econometrics.
  • Leamer, E. (1978). Specification Searches: Ad Hoc Inference with Non Experimental Data. John Wiley and Sons Inc., New York.
  • Leamer, E. (1983). “Lets take the con out of Econometrics”, The American Economic Review 73(1), 31-43.
  • Magnus, J.R. (1999). The success of econometrics. De Economist, 147(1), 50-58.
  • Manicas, P. (1987). History and Philosophy of the Social Sciences, Oxford: Basil Blackwell
  • Manicas, P. (2006). A Realist Philosophy of Social Science: Explanation and Understanding, Cambridge: Cambridge University Press
  • Oaksford, M. and Chater, N. (2007). Bayesian Rationality. Oxford: Oxford University Press
  • Russell, Bertrand. (1905). "On Denoting", Mind, 14, 479–493.
  • Sims, C.A. (1980). “Macroeconomics and Reality,” Econometrica 48, 1-48.
  • Frederick, S. (1977). The Structure of Scientific Theories 2nd edn. Chicago: University of Illinois Press
  • Thomas, R. L. (1993). Introductory Econometrics: Theory and Applications, 2 nd Edition Longman.
  • Van Fraassen, Bastiaan, C. (1980). The Scientific Image , New York: Oxford University Press
  • Wong, S. (2006). The Foundations of Samuelson’s Theory of Revealed Preference, Routledge,
  • Zaman, A. (1996). Statistical Foundations of Econometric Techniques, Academic Press. Zaman, A. (2008). Post Positivist http://ssrn.com/abstract=1319048 or http://dx.doi.org/10.2139/ssrn.1319048 Probability Available at SSRN:
  • Zaman, A. (2010). “Causal Relations via Econometrics”, International Econometrics Review, 2(1):36-56
  • Zaman, A. (2011). The Normative Foundations of Scarcity, to appear in Real World Economics Review, 60
There are 26 citations in total.

Details

Subjects Business Administration
Other ID JA68SY53ZJ
Journal Section Articles
Authors

Asad Zaman This is me

Publication Date September 1, 2012
Submission Date September 1, 2012
Published in Issue Year 2012 Volume: 4 Issue: 2

Cite

APA Zaman, A. (2012). Methodological Mistakes and Econometric Consequences. International Econometric Review, 4(2), 99-122.
AMA Zaman A. Methodological Mistakes and Econometric Consequences. IER. December 2012;4(2):99-122.
Chicago Zaman, Asad. “Methodological Mistakes and Econometric Consequences”. International Econometric Review 4, no. 2 (December 2012): 99-122.
EndNote Zaman A (December 1, 2012) Methodological Mistakes and Econometric Consequences. International Econometric Review 4 2 99–122.
IEEE A. Zaman, “Methodological Mistakes and Econometric Consequences”, IER, vol. 4, no. 2, pp. 99–122, 2012.
ISNAD Zaman, Asad. “Methodological Mistakes and Econometric Consequences”. International Econometric Review 4/2 (December 2012), 99-122.
JAMA Zaman A. Methodological Mistakes and Econometric Consequences. IER. 2012;4:99–122.
MLA Zaman, Asad. “Methodological Mistakes and Econometric Consequences”. International Econometric Review, vol. 4, no. 2, 2012, pp. 99-122.
Vancouver Zaman A. Methodological Mistakes and Econometric Consequences. IER. 2012;4(2):99-122.