 Rethinking economics: Logical gaps – theory to empiricalStuart Birks ()
Working Papers from Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol Abstract: Economists have focused on the development of theory, with a heavy focus on internal logical consistency. There has also been much effort devoted to the development of suitable empirical techniques, in particular econometrics. Less attention has been given to the requirements for applying the latter, econometrics, to analyse relationships specified in the former, theory. This paper considers some aspects of this link. Two broad aspects are addressed, namely data issues and functional specification. Three data issues are discussed, those of aggregation, the use of proxy variables, and the nature and use of index variables. These aspects of functional relationships are then discussed. They are the use of control variables, the nature of causality, and the need for structural stability. The overall implications are that many problems are assumed away in empirical economic analysis. These can fundamentally distort the findings and hence provide misleading information for policy makers. Date: 2012-01-16 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:uwe:wpaper:20121216 Access Statistics for this paper More papers in Working Papers from Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol Contact information at EDIRC. |
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