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Methodological Mistakes and Econometric Consequences

Author

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  • Asad Zaman

    () (International Institute of Islamic Economic, International Islamic University of Islamabad, Pakistan.)

Abstract

Econometric Methodology is based on logical positivist principles. Since logical positivism has collapsed, it is necessary to re-think these foundations. We show that positivist methodology has led econometricians to a meaningless search for patterns in the data. An alternative methodology which relates observed patterns to real causal structures is proposed.

Suggested Citation

  • Asad Zaman, 2012. "Methodological Mistakes and Econometric Consequences," International Econometric Review (IER), Econometric Research Association, vol. 4(2), pages 99-122, September.
  • Handle: RePEc:erh:journl:v:4:y:2012:i:2:p:99-122
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    File URL: http://www.era.org.tr/makaleler/28070080.pdf
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    References listed on IDEAS

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    1. Asad Zaman, 2010. "Causal Relations via Econometrics," International Econometric Review (IER), Econometric Research Association, vol. 2(1), pages 36-56, April.
    2. Atiq-ur-Rehman, 2011. "Impact of Model Specification Decisions on Unit Root Tests," International Econometric Review (IER), Econometric Research Association, vol. 3(2), pages 22-33, September.
    3. Leamer, Edward E, 1983. "Let's Take the Con Out of Econometrics," American Economic Review, American Economic Association, vol. 73(1), pages 31-43, March.
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    Cited by:

    1. Sultan Mehmood, 2014. "Terrorism and the macroeconomy: Evidence from Pakistan," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(5), pages 509-534, October.
    2. repec:erh:journl:v:9:y:2017:i:2:p:50-68 is not listed on IDEAS
    3. Hussain, Anwar & Rahman, Muhammad & Memon, Junaid Alam, 2016. "Forecasting electricity consumption in Pakistan: the way forward," Energy Policy, Elsevier, vol. 90(C), pages 73-80.

    More about this item

    Keywords

    Econometric Methodology; logical positivism; realism; causality; VAR models; Forecasting; surprise; goodness of fit.;

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General

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