LECTURE 1 - SCOPE, OBJECTIVES AND METHODS OF DISCIPLINE "ECONOMETRICS"

Plan 1.1 The Main Tasks of Econometrics. The Role of Econometric Studies in Economics. 1.2 The Subject, Goals, Objectives and Structure of the Course. The Place of Econometrics among the Disciplines of Basic Training in Economics. Relationship of Course Related Disciplines. 1.3 Features of Econometric Models. 1.4 The Choice of Variables and Structure Relationships. 1.5 The Role of Econometric Models in Mathematical Modeling. 1.6 Examples of Econometric Models: Cobb-Douglas Production Function, the Model of Supply And Demand in a Competitive Market, Keynes Model, Consumption Pattern.

1.1 The Main Tasks of Econometrics. The Role of Econometric Studies in Economics. Econometrics is the application of mathematics, statistical methods, and, more recently, computer science, to economic data and is described as the branch of economics that aims to give empirical content to economic relations. Econometrics is the branch of economics concerned with the empirical estimation of economic relationships, models, together with data, represent the basic ingredients of any econometric study. Econometrics is the field of economics that concerns the application of mathematical statistics and the tools of statistical inference to the empirical measurement of relationships postulated by economic theory.

Main tasks of econometrics: the research of economic processes development and forecasting of its dynamics; the right choice of factors in the construction of mathematical-statistical models; the third important task of econometrics is the selection and construction of mathematical-statistical models.

1.2 The Subject, Goals, Objectives and Structure of the Course

Separation into two components of econometrics

1.3 Features of Econometric Models. Statistical dependency relationship, when you change from one random variable changes the probability distribution law of another Correlation dependency dependence, which manifests itself in the fact that you change from one value changes the average value of the other

1.4 The Choice of Variables and Structure Relationships. Regression PairMultivariate relationship of two random variables relationship of Y from several variables that described by the function Correlation relationship between the average or relationship in general

Regression equation (models) Relations between the dependent and independent variables that are described by the relationships

Correlation field (scatter chart)

1.6 The Role of Econometric Models in Mathematical Modeling Econometric model - a function or system of functions that describes the correlation and regression relationship between economic indicators and on the base of the causal links between one or more of these parameters we can determine some variables as dependent variables, and others - as independent ones.

The reasons for the presence of random factors in regression models 1. Putting into model not all explanatory variables. 2. The wrong choice of functional form model. 3. Aggregation of variables. 4. Errors of measurement. 5. The limited statistics. 6. The unpredictability of the human factor.

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