The Art and Science of Econometrics

2Methodology Review

DOI: 10.4324/​9781003273905-2

2.1 Introduction

Econometricians have for a long time been well aware of the important influence of statistical methodologies on the development of econometrics. The modern econometric study in this area, to some extent, is more than econometric research in other areas. Understanding such an econometric methodology is a crucial departure for econometrics.

The structure of this chapter is organised as follows. Following the introduction in Section 2.1, the creation of econometrics is presented in Section 2.2; the ideas and motivation of the creating social physics are traced and reviewed in Section 2.3; the core ideas of econometrics as science are introduced and reviewed in Section 2.4; probability ...