Econometrics

Econometrics is science including the economic theory, mathematics, and statistician in one pools of circular system, becomes a different and independent science with economics, mathematics, and also statistics.

Beginning of econometrics development introduced by Vilferdo Pareto having contribution in explaining shelf distribution of individual earnings and choice passed mathematical approach based on to the economic theory. Then in its development, econometrics becomes branch itself in economics. Jan Tinbergen is one of main character in science expansion.

Econometrics is applied as a means of economic analysis with aim to test truth of theorems the economic theory which in the form of the relation between economic variable with empiric data. Having the character of apriori theorems at economics expressed beforehand in the form of mathematics (conceived of model) causing can be done testing to the theorems. Making of econometrics model is one of contribution econometrics besides prediction making (forecasting) and making various decisions of alternative having the character of quantitative causing can water down the decision takers to take choice.

Based on data applied, econometrics is divided to become three analysis, that are:

1. Time series analysis, explains about behavior of a variable along the length of some times successively,

2. Cross section, explains between some areas in one certain time (snapshot), and

3. Panel data analysis, merges between time series analysis with cross section.

Benefit from approach of econometrics is as follows:

1. Verification, as a means of proved or tests validity the economic theory. A defensible theory if have been through empiric testing, and econometrics assists to do testing of the empiric.

2. Estimating, to yield economic relation coefficients valuations. The valuation is benefit to decision making.

3. Forecasting, to forecast economic magnitudes which will come.

Econometrics applied as one of equipment of test in journal writing, thesis, dissertation, and script material. In practice, econometrics applied to do planning and economy policy analysis, and optimal of company performance in corporate world.