- Econometric model
are specifications ofEconometric models,regression techniques, such asordinary least squares ,probit s,logit s, tobits, andlinear probability models . These are used byeconomists to analyzecorrelation al relationships, usually with the hope of determiningcausation . 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 themacroeconomy and 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 candidateGeorge W. Bush wanted 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 theFederal Reserve Bank econometric model and theDRI-WEFA (nowGlobal Insight ) model.**External links*** [

*http://www.dri-wefa.com/ DRI-WEFA*]

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