What is econometrics?
In short, econometrics is a combination of economics and mathematics. Where economics gets stuck, econometrics takes over. Econometrics applies the economic theorems and attempts to predict future economic events by means of mathematical and statistical techniques.
For example, let’s consider the rate of a shares fund. It is not unheard of for a shares fund to make a 5% profit one day, followed by an 8% loss the next day. This makes it seem like the course of the rate is completely unpredictable. The challenge for econometricians is to make well-founded forecasts for these kinds of funds. Many companies and government institutions use econometric predictions to establish their strategy.
The different directions within Econometrics