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Econometric reduction theory and philosophy


  • Genaro Sucarrat


Econometric reduction theory provides a comprehensive probabilistic framework for the analysis and classification of the reductions (simplifications) associated with empirical econometric models. However, the available approaches to econometric reduction theory are unable to satisfactorily accommodate a commonplace theory of social reality, namely that the course of history is indeterministic, that history does not repeat itself and that the future depends on the past. Using concepts from philosophy this paper proposes a solution to these shortcomings, which in addition permits new reductions, interpretations and definitions.

Suggested Citation

  • Genaro Sucarrat, 2010. "Econometric reduction theory and philosophy," Journal of Economic Methodology, Taylor & Francis Journals, vol. 17(1), pages 53-75.
  • Handle: RePEc:taf:jecmet:v:17:y:2010:i:1:p:53-75 DOI: 10.1080/13501780903528978

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    References listed on IDEAS

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    Cited by:

    1. Bauwens, Luc & Sucarrat, Genaro, 2010. "General-to-specific modelling of exchange rate volatility: A forecast evaluation," International Journal of Forecasting, Elsevier, vol. 26(4), pages 885-907, October.
    2. Sucarrat, Genaro, 2009. "Forecast Evaluation of Explanatory Models of Financial Variability," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 3, pages 1-33.
    3. Kvamsdal, Sturla F., 2012. "Technological Change in Renewable Resource Industries: An Alternative Estimation Approach," Discussion Papers 2012/14, Norwegian School of Economics, Department of Business and Management Science.
    4. Felix Pretis & James Reade & Genaro Sucarrat, 2016. "General-to-Specific (GETS) Modelling And Indicator Saturation With The R Package Gets," Economics Series Working Papers 794, University of Oxford, Department of Economics.

    More about this item


    theory of reduction; DGP; possible worlds; econometrics and philosophy;

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General


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