Purposes and limitations of econometric analysis according to recent approaches

Econometrics demands that economists be familiar both with mathematical statistics and with different branches of higher mathematics. Economists – Lombardini argues in his essay – believe this scientific discipline has some utility, insofar as it paves the way to new perspectives and new paths in economic research. The A. offers a systematic description of the origins and the most recent developments of econometrics and introduce the reader to the most debated methodological issues arising in the building up of econometric models, such as the identification problem, the aggregation of individual demand or supply functions and the stochastic character of economic relations, citing what he deem essential for the critical evaluation of the new econometric methods. The A. highlights the potential as well as the limitations of econometric research, focusing especially on the need to develop a truly dynamic analysis and to bring the influence of institutions at the centre of economic inquiry.