THE THEORETICAL FOUNDATIONS AND PRACTICAL APPLICATIONS OF ECONOMETRIC MODELING

Аннотация:

Econometric modeling provides a rigorous and systematic framework for translating economic theory into empirically testable relationships using real-world data. Moreover, econometric models support causal inference by addressing key empirical challenges such as endogeneity, omitted variable bias, multicollinearity, and structural breaks. This study examines the theoretical foundations of econometric modeling, including model specification, identification, estimation, inference, and diagnostic testing, while also highlighting its practical applications in policy evaluation, macroeconomic forecasting, finance, and business analytics. Furthermore, contemporary econometric approaches—such as panel data techniques, instrumental variables, and robust estimation methods—are discussed as effective tools for improving empirical validity. Overall, the findings emphasize that econometric modeling is most effective when theoretical consistency, data quality, and methodological rigor are carefully aligned.