A Scientific View of Economic Data Analysis

Cornelis Los

Eastern Economic Journal, 1991, vol. 17, issue 1, 61-71

Abstract: Identification of systems from empirical data is a fundamental problem of economic science. In 1982 Leontief testified that Haavelmo's statistical approach to this problem has not advanced an objective understanding of economic systems. The question is: why? The standard presumptions of econometrics, e.g. that the system (" model") is known before the data are analyzed, are unscientific. They can be shown to imply that scientific evidence will be ignored. The results depend on these prejudices and not on the data, as is illustrated by a detailed example for Wall Street's investment advisory practice. However, an objective identification method, based on the recently discovered Kalman Theorem, exists and leads to surprising results.

JEL-codes: B41 C50 (search for similar items in EconPapers)
Date: 1991
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Citations: View citations in EconPapers (6)

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