“In the earlier times people had no statistics and they have to fall back on lies. Marx, An Introduction to Mathematical Statistics and Its Applications (3rd edition or later), Prentice Hall (2001-). Overall though, statistics will give you skills you can use day-to-day in an analytical role, while economics really only teaches you a way of thinking about problems. “Statistics, as a tool, require proper usage and the results obtained through statistical analysis require intelligent interpretation.” —F.C. This chapter will introduce basic analytic tools for asymptotic analysis or large sample analysis when the sample size n → ∞. These disciplines make-use of observations, facts and figures, enquiries and experiments etc. By Michael Taillard . Economic statistics are used for calculating various factors such as GDP (Gross Domestic Product) and GNP (Gross National product), which are essential for knowing our exact economic condition. The United States Census Bureau is … Statistics also alert us about any trend developing, which can be utilized for developing sound economic strategies. Some of the statistical tools used in economic analysis are as follows: 1. Probability theory is the foundation of statistical science, providing a mathematical means of modeling random experiments or uncertainty. Statistics can be used for making sales projections, financial analysis of capital expenditure projects, constructing profit projections for a new product, setting up production quantities, and making a sampling analysis to determine the quality of a product. Enter your email address below and we will send you the reset instructions, If the address matches an existing account you will receive an email with instructions to reset your password, Enter your email address below and we will send you your username, If the address matches an existing account you will receive an email with instructions to retrieve your username. https://doi.org/10.1142/9789813228825_0008. In this chapter, we introduce the classical linear regression theory, including the classical model assumptions, the statistical properties of the Ordinary Least Squares (OLS) estimator, the t-test and the F-test, as well as the Generalized Least Squares (GLS) estimator and related procedures. It is also used in research of stocks and analysis of economic models. Such information is sometimes used by governments to set economic policy and by private business to aid decisions on prices, inventory, and production. To forecast your finances, you watch for trends, patterns, and relationships, determine the probability of these influencing a particular outcome, and use that to model your forecast. The use of calculus enables us to investigate probability more deeply. Statistical inference in economics, namely econometric analysis, plays a crucial methodological role in modern economics, particularly in empirical studies in economics. Misuse of data can be made by biased persons with only small changes made in the data. Statistics plays an important role in banking. Measures of dispersion (Q.D, M.D., S.D. Knife can be used for cutting vegetable and fruits but it can also cut the finger of a child if he tries upon it. This software is designed to calculate numerical solutions for non-linear general equilibrium models so that the comparative static results of economic theory may be illustrated. In particular, the maximum likelihood estimation and the method of moments estimation/generalized method of moments estimation are discussed, and their asymptotic properties investigated. A number of quantitative-oriented probability concepts will be introduced. In this chapter, we will introduce basic concepts in hypothesis testing, and discuss the three fundamental principles of hypothesis testing — the Wald test, the Lagrange multiplier test, and the likelihood ratio test. Why does it rise and how can it be omitted or reduced considerably? Chapter 2 introduce some fundamental estimation methods for evaluating parameter estimators using the conditional distributions correlation! Various fields of science, including economics only small changes made in the previous chapters we! For economics statistics for economics statistics for economics concerns itself with the of! 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