Econometrics – Alchemy or Science?

Abstract

Abstract The key message is that econometrics is potentially scientific precisely because alchemy is creatable, detectable, and refutable. Since the validity of a model is an intrinsic property in relation to the evidence, it cannot be affected by how that model is selected; the three golden rules of econometrics are ‘test, test, and test’. However, the selection method is not thereby irrelevant: some methods are inherently flawed. The ‘alchemy’ here explains the behaviour of UK inflation ‘better’ by rainfall than by the stock of money. Later analyses reveal the hidden flaws thus resolved, when empirical regressions are meaningful.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 60 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.