EconTalk Ed Leamer on the State of Econometrics
21 snips
May 10, 2010 
Ed Leamer, an esteemed economist at UCLA, dives deep into econometrics and its intricacies. He critiques the fragility of results from model choices and stresses the importance of distinguishing between robust and weak findings. Leamer discusses the shortcomings of randomized experiments and how they may not apply broadly, while highlighting the essential role of housing in business cycles. His provocative view positions economic theory as 'useful fiction,' urging humility and transparency in empirical research.
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Sturdy Versus Fragile Inferences
- Ed Leamer argues that econometric conclusions often hinge on fragile modeling choices rather than robust evidence.
- He urges tools and culture to separate sturdy inferences from fragile ones.
Report Sensitivity And Assumptions
- Report sensitivity by showing how conclusions change across reasonable alternative specifications.
- Communicate assumptions explicitly so readers can judge which inferences are sturdy.
Significance Means Measurable Not Important
- Statistical significance measures measurability, not economic importance.
- Leamer prefers calling results "measurable" and separately assessing economic magnitude.
