Monday, October 06, 2008

Mostly Harmless Econometrics

DON'T PANIC! The core methods in today's econometric toolkit are linear regression for statistical control, instrumental variables methods for the analysis of natural experiments, and differences-in-differences methods that exploit policy changes.

This is the refrain of Joshua Angrist and Steve Pischke in the preface to their new book: "Mostly Harmless Econometrics". A preview is available here. My econometrics professor, Paul Devereux, tells me that there are many references throughout to the Hitchhikers Guide to the Galaxy. There is also a range of "Mostly Harmless" t-shirts for sale; see below for a sample!

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