Linking the Theory with the Data: That is the Core Problem of International Economics
In: Handbook of Econometrics
The greatest problem for empirical analysis is how best to allow the context to affect the inferences. Econometric theory presupposes contextual "restrictions" that can be taken as given or assigned a probability distribution. These contextual inputs are rarely available. I illustrate this point with a review of the empirical work in international economics which has focused not on properties of estimators but instead how best to link the theory with the data. I argue that the two errors we should worry about are not rejecting a true null or accepting a false null but rather taking the theory too seriously and not taking the theory seriously enough.
|This chapter was published in: ||This item is provided by Elsevier in its series Handbook of Econometrics with number
6a-67.||Handle:|| RePEc:eee:ecochp:6a-67||Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/bookseriesdescription.cws_home/BS_HE/description|
When requesting a correction, please mention this item's handle: RePEc:eee:ecochp:6a-67. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.