Zombie Statistics in Zombie Economics

May 6, 2011 § Leave a comment

Let’s put some quotes here for me to think about later.

The econometric tests reported in studies of the Great Moderation showed a statistically significant change occurring in the mid-1980s. However, it is an open secret in econometrics that such tests mean very little, since the same set of time series data that suggests a given hypothesis must be used to test it. This is quite unlike the biomedical problems for which the statistical theory of significance was developed, where a hypothesis is developed first, and then an experiment is designed to test it.

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