Statistical and mathematical analysis of economic relationships. Econometrics creates equations to describe phenomena such as the relationship between changes in price and demand. Econometricians estimate production functions and cost functions for firms, supply-and-demand functions for industries, income distribution in an economy, macroeconomic models and models of the monetary sector for policy makers, and business cycles and growth for forecasting. Information derived from these models helps both private businesses and governments make decisions and set monetary and fiscal policy. See also Ragnar Frisch; macroeconomics; microeconomics.
This entry comes from Encyclopædia Britannica Concise.
For the full entry on econometrics, visit Britannica.com.
Seen & Heard
What made you look up econometrics? Please tell us what you were reading, watching or discussing that led you here.