Econometric models are statistical models used in econometrics. An econometric model specifies the statistical relationship that is believed to hold between the various economic quantities pertaining to a particular economic phenomenon under study.
Besides, what is meant by economic theory?
the theory that an increasing consumption of goods is economically beneficial. Keynesianism. the economic theories of John Maynard Keynes who advocated government monetary and fiscal programs intended to stimulate business activity and increase employment.
What is the use of models in economics?
The Use of Models in Economics. Economic models are simplified descriptions of reality used by economists to help them understand real life economies. An economic model includes several economic variables and describes the nature of the logical relationships between these variables.
Why economic theory is important?
Indeed one of the important roles of economic theory is to keep track of benefits and costs. The idea of opportunity cost is a fundamental one in economics, and would be very difficult to use without a theoretical model of economic linkages.