Intermediate between mathematics, statistics, and economics, we find a new discipline which, for lack of a better name, may be called econometrics. E… - Ragnar Frisch

(Econometrics is) the unification of economic theory, statistics and mathematics.

In this feverish world of ours, where one wants the economic analyses to produce easily understandable results quickly and at the least possible cost, some of us have fallen into the habit of assuming for simplicity that the hundreds sometimes thousands of variables that enter into the analyses are linked together by very simple relationships. Frequently we even go so far as to assume linear relationships. Only in this way have we been able to feed our problems into the electronic computers and get mechanical answers quickly and at low cost.

Questions of convergence under an infinite time horizon will depend so much on epsilontic refinements in the system of assumptions — and on the infinite constancy of these refinements — that we are humanly speaking absolutely certain of getting infinite time horizon results which have no relevance to concrete reality. And in particular we are absolutely certain of getting irrelevant results if such epsilontic exercises are made under the assumption of a constant technology. 'In the long run we are all dead.' These words by Keynes ought to be engraved in marble and put on the desk of all epsilontologists, in growth theory under an infinite horizon.

In this essay on econometrics in its conception and its use in economic planning for the betterment of man’s fate, I will try to cover a very broad field. When talking about the methodology in the particular fields mentioned - about which I am supposed to have a little more than second hand knowledge - I have always found it utterly inadequate to focus attention only on these special fields without seeing them in a much broader perspective. Therefore it was inevitable that I should have to include in the field of vision of this paper also some branches of science where I can only speak as a layman, hopefully as a somewhat informed layman. For whatever blunders I may have made in these fields I must ask for the reader’s forgiveness