Econometrics is the use of mathematical and statistical methods in describing economic systems. But in my opinion, it is much more than that. It is the reasoning and logic behind many economic theories. It is the evidence needed to make sense of a lot of confusing relationships in the economic world. I agree with the statement that econometrics is a bridge between economic theory and reality. It helps us develop skills on how to see reason and understanding of concepts in the economy. With econometrics we can make relationships with everyday concepts, for example, does a person’s level of education impact their wage? Using econometrics, we can form a relationship using data collected and then form a visual representation of this. Another example would be does the number of employees that firm has determine the amount of produce made in a period?
With econometrics we can easily make sense of these relationships and many other examples along with them. I also agree with what is said in the statement that the skills we develop using econometrics can be applied to a lot of fields because above I have used both a microeconomic and a macroeconomic example. It doesn’t matter if it something as simple as your own wage or regarding the biggest companies in the world. Econometrics help us to extract the information needed to understand the relationship. Like I said before, econometrics provides us with simple explanations and visual representations of many confusing relationships in the economy today. Rather than looking at essays and theories we are looking at graphs and equations, which to me, is a lot easier and more relatable than hundreds of words on a page. I do believe that it is worth studying economics as to me, there is a lot of benefits to it.
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