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Scientific explanation in econometrics. (English) Zbl 1032.91035
Strøom, Steinar (ed.), Econometrics and economic theory in the 20th century. The Ragnar Frisch centennial symposium. Papers from the symposium held in Oslo, Norway, March 3-5, 1995. Cambridge: Cambridge University Press. Econ. Soc. Monogr. 31, 345-370 (1998).
The author suggests formal criteria by which one can distinguish between good and bad scientific explanations in econometrics. To this aim a formal characterization of logically and empirically adequate scientific explanation is presented. The new criteria are further developments of C. G. Hempel’s [Aspects of scientific explanation and other essays in the philosophy of science. Free Press, New York (1965)] deductive-nomological scheme for scientific explanation. More specifically, the author suggests new ideas concerning the meaning of economic theories, describes the core structure of theory-data confrontation in economics, and explains what it means to say that a theory is empirically relevant. For example, in addition to laws in economics, so called mechanisms are used in a process of suggested scientific explanation. The formal constructions are illustrated by giving a scientific explanation of an observation that Treasury Bills in the U.S. market behave like cointegrated ARMA stochastic processes.
For the entire collection see [Zbl 0944.00092].
MSC:
91B02 Fundamental topics (basic mathematics, methodology; applicable to economics in general)
62P20 Applications of statistics to economics
91B84 Economic time series analysis
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