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.
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Volume (Year): 17 (1991) Issue (Month): 1 (Jan-Mar) Pages: 61-71 Download reference. The following formats are available: HTML
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Handle: RePEc:eej:eeconj:v:17:y:1991:i:1:p:61-71
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Find related papers by JEL classification: C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Hendry, David F, 1980.
"Econometrics-Alchemy or Science?,"
Economica,
London School of Economics and Political Science, vol. 47(188), pages 387-406, November.
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