Some comments on the role of econometrics in economic theory

Martin Eichenbaum

Economic Perspectives, 1996, vol. 20, issue Jan, 22-31

Abstract: The basic tension facing econometricians is that structural models are necessary for addressing monetary policy questions. But all models are, by their very nature, false. Econometric programs that focus on testing whether models are true will be ignored by practicing macroeconomists. The critical task facing econometricians is to develop diagnostic tools for assessing the usefulness of models for addressing particular questions. This article reviews two diagnostic strategies.

Keywords: Econometrics; Economics (search for similar items in EconPapers)
Date: 1996
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Journal Article: Some Comments on the Role of Econometrics in Economic Theory (1995)
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