| Description |
Econometrics is an instrument commonly employed to study social issues, aid in the policy making process, and economic analysis. However, the accuracy and validity of the results are grossly overstated. An examination of conventional econometric processes, critical analysis of societal complexities, and a theoretical overview of scientific findings all allude that econometric research results are fragile at best and fraudulent at worst. Due to the dynamic, nonlinear relationship among variables, and the tendency for extreme observations from the regression process, the confidence and stability of the results are often over-stated. Although realistic assumptions in models are ignored by some; the problem of induction and falsifiability is a persisting stake in the heart of econometric theory. Nevertheless, many scholars of conventional thought will attempt to claim quasi-control through sophisticated statistical methods. While a cure-all remedy or restoration is not obtained from the results, it is shown that society can reap a long-run benefit by addressing the arrogance of econometrics and noting which situations are ideal for econometric analysis. |
