Economics 513
1
Lecture 2: The Classical Linear Regression Model
Introduction
In lecture 1 we
•
Introduced concept of an economic relation
•
Noted that empirical economic relations do not resemble textbook
relations
•
Introduced a method to find the best fitting linear relation
No reference to mathematical statistics in all of this.
Initially econometrics
did not use the tools of mathematical statistics.
Mathematical statistics develops methods for the analysis of data generated
by a random experiment in order to learn about that random experiment.

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