Role of econometrics Examine how well an economic theory can explain historical economic data(particularly the important stylized facts) Test validity of economic theories and economic hypothesis ◆ Predict the future evolution of the economy ◆ Make policy evaluation such as a public training program Econometrics 15-Zhuxi 9Econometrics 15 - Zhuxi 9 Role of econometrics Examine how well an economic theory can explain historical economic data (particularly the important stylized facts) Test validity of economic theories and economic hypothesis Predict the future evolution of the economy Make policy evaluation such as a public training program