ECON 208 Chapter Notes - Chapter 2: Time Series, Panel Data

• School: McGill University
• Department: Economics
• Course: ECON 208
• Professor: Sebastien Forte

Document Summary

Normative statements- based on valuable judgments (what someone ought to do) Positive statements- statements about what is, was, or will be. Disagreements among economics are based on: poor communication, failure to acknowledge the full state of their ignorance, the positive/normative distinction, must differentiate between normative proffered advice and positive facts. Model and theory are often interchangeable, but a theory consists of: definitions about variables, a set of assumptions. **most common are that consumers maximize utilities and that businesses always profit maximize: a set of predictions (hypothesis) Rejection vs. confirmation: your hypothesis must be testable or it cannot be accepted or rejected. In statistical analysis, it is not possible to control everything, so there is always a margin of error. Index numbers: compare variables with different magnitudes- is done so that it is relative to a base period. Cross sectional data- variables across different areas in a period of time (ex. All of the consumer prices in a specific year)