Econometrics

Originally published in 1951, this volume reprints the classic work written by one of the leading global econometricians. Econometrics is structured as followed: Part 1 explains the relationship of Econometrics to Economics and Statistics. Part 2 outlines the process of formulating economic hypotheses mathematically and of subjecting them to a statistical test. Part 3 deals with the various component equations of the economic system - the psychic reactions, technical relations and reactions of business life and describes the process of setting up an economic model of the system as a whole. Part 4 llustrates the use of econometric methods for policy purposes.

In this connection the fact pointed out by Zimmerman* is important that before
1910 railway investments formed a much more important part of total investments
than after that year. § 38. Substitution Elasticities In commercial relations— which
belong to the field of "objective" decisions described in § 36— competition still
plays an important role and consequently also the substitution elasticity between
products supplied by competing firms or countries. The trade of a small country in
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