Publisher's Synopsis
Econometrics has evolved as a separate discipline from mathematical statistics because the former focuses on the problems inherent in collecting and analyzing nonexperimental economic data. Nonexperimental data are not accumulated through controlled experiments on individuals, firms, or segments of the economy. Experimental data are often collected in laboratory environments in the natural sciences, but they are much more difficult to obtain in the social sciences. Although some social experiments can be devised, it is often impossible, prohibitively expensive, or morally repugnant to conduct the kinds of controlled experiments that would be needed to address economic issues. Econometrics is based upon the development of statistical methods for estimating economic relationships, testing economic theories, and evaluating and implementing government and business policy. The most common application of econometrics is the forecasting of such important macroeconomic variables as interest rates, inflation rates, and gross domestic product. Whereas forecasts of economic indicators are highly visible and often widely published, econometric methods can be used in economic areas that have nothing to do with macroeconomic forecasting. Econometrics and Financial Management focuses on the behavioral issues in econometrics, financial management, quality control and optimization. It aims to discuss the effect of the emergence of the behavioral theory in different fields of research. It is also concerned with the link between the real and financial sides of the economy, forecasting and recent developments in econometric techniques applicable to financial management research. Naturally, econometricians have borrowed from mathematical statisticians whenever possible. The method of multiple regression analysis is the mainstay in both fields, but its focus and interpretation can differ markedly. In addition, economists have devised new techniques to deal with the complexities of economic data and to test the predictions of economic theories.
