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Econometrics 2016, 4(4), 50; doi:10.3390/econometrics4040050

The Status of Bridge Principles in Applied Econometrics

Department of Economics, University of Oslo, Pb. 1095 Blindern, 0317 Oslo, Norway
Academic Editor: Marc S. Paolella
Received: 4 September 2016 / Revised: 30 November 2016 / Accepted: 2 December 2016 / Published: 17 December 2016
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The paper begins with a figurative representation of the contrast between present-day and formal applied econometrics. An explication of the status of bridge principles in applied econometrics follows. To illustrate the concepts used in the explication, the paper presents a simultaneous-equation model of the equilibrium configurations of a perfectly competitive commodity market. With artificially generated data I carry out two empirical analyses of such a market that contrast the prescriptions of formal econometrics in the tradition of Ragnar Frisch with the commands of present-day econometrics in the tradition of Trygve Haavelmo. At the end I demonstrate that the bridge principles I use in the formal-econometric analysis are valid in the Real World—that is in the world in which my data reside. View Full-Text
Keywords: present-day econometrics; formal econometrics; theory-data confrontation; bridge principles; applied econometrics present-day econometrics; formal econometrics; theory-data confrontation; bridge principles; applied econometrics

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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Stigum, B.P. The Status of Bridge Principles in Applied Econometrics. Econometrics 2016, 4, 50.

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