I would appreciate someone clarifying whether and how “Econometrics” fits within Austrian economics. I have described Austrian economics as “non-statistical” or “non-mathematical”, based on deductive logic from certain basic axioms of human action. The push back to that has been, “Don’t you need to …

And how would one test an economic theory? :slight_smile:

Relevant articles: Frank Shostak’s “What Is Wrong With Econometrics?”: [image] Mises Daily | Mises Institute Bob Murphy’s article “Econometrics: A Strange Process”: [image] Mises Daily | Mises Institute

Austrians use econometrics as a foreign language that they occassionally have to speak in order to illustrate theory or historical points. You can’t really test economic theories because it’s impossible to predict in a quantitative manner, and if you do somehow manage to, your prediction becomes a p…

No, i’ts not. Mainstream economists use empirical data to see if it matches up with economic theory. If you’ve ever taken an econometrics course you’d know that they tell you the shortcomings of predictions and how you can poke holes in any econometric study.

So justin, if they are aware of the shortcomings, why they keep doing it? Broken clock tactic?

“No, i’ts not. Mainstream economists use empirical data to see if it matches up with economic theory. If you’ve ever taken an econometrics course you’d know that they tell you the shortcomings of predictions and how you can poke holes in any econometric study.” - justinx0r Then what is the point of…

What do they do if the data doesn’t match the theory?

Econometrics is far superior to conventional “post hoc ergo propter hoc” nonsense that passes for evidence in forums/blogs/etc. “In 1978 Norway had 60% tax rates and record growth - I guess that means tax rates are good”. Of course there are at least two things wrong with this. One is that we are o…

What do they do if the data doesn’t match the theory? The “great” thing about data is that it can be made to fit almost any theory. That’s the greatest weakness of empirical economics.

The role of "Econometrics" in Austrian theory

Economics Economics Questions

Caley_McKibbin April 4, 2011, 2:56pm 9

My last post here explains that.

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The role of "Econometrics" in Austrian theory

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