Jokes about econometrics/econometrians
A mathematician, an accountant and an economist apply for the same job.
The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."
Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."
Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says "What do you want it to equal?"
A mathematician, a
theoretical economist and an econometrician are asked to find a black cat (who
doesn't really exist) in a closed room with the lights off:
- The mathematician gets crazy trying to find a black cat that doesn't exist inside the darkened room and ends up in a psychiatric hospital.
- The theoretical economist is unable to catch the black cat that doesn't exist inside the darkened room, but exits the room proudly proclaiming that he can construct a model to describe all his movements with extreme accuracy.
- The econometrician walks securely into the darkened room, spend one hour looking for the black cat that doesn't exits and shouts from inside the room that he has it catched by the neck."
These deep thoughts of colleague economists were originally collected by Hiroyuki Kawakatsu
How to do research
Keep the ass to the
Everything has been
thought before, but the problem is to think of it again.
perceptions are empty; perceptions without concepts are blind.
Mathematics has no
symbols for confused ideas.
All models are wrong but
some are useful.
Far better an approximate
answer to the right question, which is often vague, than an exact answer to the
wrong question, which can always be made precise.
The paradox is now fully
established that the utmost abstractions are the true weapons with which to
control our thought of concrete fact.
In the long-run, there's
just another short-run.
Life can only be
understood backwards, but it must be lived forwards.
Someone once said about
partisan analysts that they use economic data the way a drunkard uses a
lamppost: for support rather than illumination. Or as Disraeli put it, there
are three kinds of lies: lies, damn lies, and statistics.
Theories are testable
where they are least needed, and are not testable where they are most needed.
If you torture the data
long enough, Nature will confess.
There are two things you
are better off not watching in the making: sausages and econometric estimates.
Doing econometrics is
like trying to learn the laws of electricity by playing the radio.
Any observed statistical
regularity will tend to collapse once pressure is placed upon it for control
Time series regression
studies give no sign of converging toward the truth.
Any time series
regression containing more than four independent variables results in garbage
Forecasting is like
trying to drive a car blindfolded and following directions given by a person
who is looking out of the back window
Given the choice between
Bob Solow and an econometric model to make forecasts, I'd choose Bob Solow; but
I'd rather have Bob Solow with an econometric model, than Bob Solow without one
Keep in mind the three
most important aspects of real data analysis: compromise, compromise, and
The four golden rules of
2.Be infinitely creative,
3.Be outstandingly lucky,
4.Otherwise, stick to being a theorist
A good empirical study
requires three components:
1.A concise and sensible theoretical framework that is related to the questions to be asked,
2.Reasonably good data, and
3.An experiment or an event or a set of circumstances that give the data a chance to answer the questions asked. In short, the model needs to be identifiable from the data at hand.
students of economics at lunch:
Student 1" 'Do you know what are the two most important degrees in economics?"
Student 2:"The MSc and the PhD?" Student 1:"No, the zeroth and the first!"
+ A student was sitting in an econometric class taught by Prof White. The lecture was too difficult that few students understood it.
GROUP ECONOMIST VIRUS - Divides your hard disk into hundreds of little units,
each of which does practically nothing, but all of which claim to be the most
important part of the computer.
ECONOMETRICIAN VIRUS - Sixty percent of the PCs infected will lose 38 percent of their data 14 percent of the time (plus or minus a 3.5 percent margin of
POLITICAL THINK TANK ECONOMIST VIRUS - Doesn't do anything, but you can't get rid of it until next election.
GOVERNMENT ECONOMIST VIRUS - nothing works on your system, but all your diagnostic software says everything is just fine.
MARXIAN ECONOMIST VIRUS - Helps your computer shut down whenever it wants to.
SOVIET ECONOMIST VIRUS - Crashes your computer, but denies it ever happened.
MAINSTREAM ECONOMIST VIRUS - It claims it feels threatened by the other files on your PC and erases then in "self-defense."
CENTRAL BANK ECONOMIST VIRUS - Makes sure that it's bigger than any other file.
MULTINATIONAL CORPORATION ECONOMIST VIRUS - Deletes all monetary files, but keeps smiling and sending messages about how the economy is going to get better.
SUPPLY SIDE ECONOMIST VIRUS - Puts your computer to sleep for four years. When your computer wakes up, you're trillion more dollars in debt.
NEW ECONOMY VIRUS - Also known as the "Tricky Dick Virus." You can wipe it out, but it always makes a comeback.
ENVIRONMENTAL ECONOMIST VIRUS - Before allowing you to delete any file, it first asks you if you've considered the alternatives.
Value of human capital
Engineers and scientists will never make as much money as business executives. Now a rigorous mathematical proof that explains why this is true:
Postulate 1: Knowledge is
Postulate 2: Time is Money.
As every engineer knows,
---------- = Power
Since Knowledge = Power, and Time =Money, we have
--------- = Knowledge
Solving for Money, we get:
----------- = Money
Thus, as Knowledge
approaches zero, Money approaches infinity regardless of the Work done.
Conclusion: The Less you Know, the more money you Make.
We have 2 classes of forecasters: Those who don't know . . . and those who don't know they don't know.
- John Kenneth Galbraith
An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.
- Laurence J. Peter
A study of economics usually reveals that the best time to buy anything is last year.
- Marty Allen
What's the difference between mathematics and economics?
Q: Why is there a Nobel Prize for economics and none for other social sciences?
A: They already have one in literature.