Philippine E-Journals

Econometrics: The Tool of Economics

Bernardo M. Villegas

Discipline: Economics, Social Science

 

Abstract:

Many of us are often tempted to dabble in economic theorizing because of the impression that we get from self-styled economists that logic and common sense are all you need to expound economic theories. Take some popular economic opinions nowadays. A business-"economist" was heard to say: "Those people at the Central Bank should have known better. When they issued CB Circular 260, they created a credit-squeeze, making it difficult, if not impossible, for businessmen to borrow what they needed for capital expenditures. With a decrease in business investment, the national income and employment of the nation naturally dropped. The CB should lift 260 completely, not halfheartedly as it did by issuing Circular 264." Statements like these have earned for this business man the title "economist", lavishly conferred to him by the unknowing press.