Basic Econometrics ` Basic Econometrics

Introduction Why a separate discipline?

• Economic Statistics is mainly concerned with collecting, processing and presenting economic data. It does not being concerned with using the collected data to test economic theories
• Mathematical statistics provides many of tools for economic studies, but econometrics supplies the later with many special methods of quantitative analysis based on economic data

• May 2004

• Prof. Himayatullah

• May 2004

• Prof. Himayatullah

• Econometrics

• Economic
• Theory

• Mathematical
• Economics

• Economic
• Statistics

• Mathematic
• Statistics

Introduction Methodology of Econometrics

• Statement of theory or hypothesis:
• Keynes stated: ”Consumption increases as income increases, but not as much as the increase in income”. It means that “The marginal propensity to consume (MPC) for a unit change in income is grater than zero but less than unit”

• May 2004

• Prof. Himayatullah