- Econometric model
Econometricmodels, are specifications of regressiontechniques, such as ordinary least squares, probits, logits, tobits, and linear probability models. These are used by economiststo analyze correlational relationships, usually with the hope of determining causation. They are by no means only used to estimate macroeconomic trends. They are, quite more frequently, used in microeconomics to estimate virtually any sort of social relationship (much as metric models, involving these same regression techniques, are used in other social sciences). Examples of econometric models can be found in empirical articles, which are published in academic journals ( Econometrica, Journal of Political Economy, for example).
Econometric models in macroeconomics are used by economists to find standard relationships among aspects of the
macroeconomyand use those relationships to predict the effects of certain events (like government policies) on inflation, unemployment, growth, etc. Econometric models generally have a short-run aggregate supply component with fixed prices, and aggregate demand portion, and a potential output component. As an example in the past, the 2000 presidential candidate George W. Bushwanted to know how his planned tax cut would affect the economy. Economists entered the tax into their model and came up with an estimate of the effect. Two famous econometric models are the Federal Reserve Bankeconometric model and the DRI-WEFA(now Global Insight) model.
* [http://www.dri-wefa.com/ DRI-WEFA]
Wikimedia Foundation. 2010.
Look at other dictionaries:
Model selection — is the task of selecting a statistical model from a set of candidate models, given data. In the simplest cases, a pre existing set of data is considered. However, the task can also involve the design of experiments such that the data collected is … Wikipedia
Model (macroeconomics) — A model in macroeconomics is a logical, mathematical, and/or computational framework designed to describe the operation of a national or regional economy, and especially the dynamics of aggregate quantities such as the total amount of goods and… … Wikipedia
Wharton Econometric Forecasting Associates — Wharton Economic Forecasting Associates (WEFA) was a world leading Economics forecasting and consulting organisation founded by Nobel Prize winner Lawrence Klein. WEFA was a spinoff of the Wharton School of the University of Pennsylvania, where… … Wikipedia
Heckscher-Ohlin model — The Heckscher Ohlin model (H O model) is a general equilibrium mathematical model of international trade, developed by Eli Heckscher and Bertil Ohlin at the Stockholm School of Economics. It builds on David Ricardo s theory of comparative… … Wikipedia
Macroeconomic model — A macroeconomic model is an analytical tool designed to describe the operation of the economy of a country or a region. These models are usually designed to examine the dynamics of aggregate quantities such as the total amount of goods and… … Wikipedia
Economic model — A diagram of the IS/LM model In economics, a model is a theoretical construct that represents economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified… … Wikipedia
Tobit model — The Tobit Model is an econometric, biometric model proposed by James Tobin (1958) to describethe relationship between a non negative dependent variabley i and an independent variable (or vector) x i.The model supposes that there is a latent (i.e … Wikipedia
Exogenous growth model — The Exogenous growth model, also known as the Neo classical growth model or Solow growth model is a term used to sum up the contributions of various authors to a model of long run economic growth within the framework of neoclassical… … Wikipedia
Gravity model of trade — The gravity model of trade in international economics, similar to other gravity models in social science, predicts bilateral trade flows based on the economic sizes of (often using GDP measurements) and distance between two units. The model was… … Wikipedia
Neoclassical growth model — See also: Ramsey growth model The neoclassical growth model, also known as the Solow–Swan growth model or exogenous growth model, is a class of economic models of long run economic growth set within the framework of neoclassical economics.… … Wikipedia