Department of Econometrics & Empirical Reasoning

The Department of Econometrics & Empirical Reasoning exists to ensure that all empirical work conducted at Gillory & Associates is theoretically grounded, methodologically disciplined, and economically meaningful. Its role is not to maximize statistical sophistication, but to safeguard the logical connection between data, theory, and inference.

The Department governs the use of econometric tools across G&A, defining when empirical methods are appropriate, how results should be interpreted, and—critically—where statistical analysis reaches its limits. 

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Core Areas of Instruction and Research

1. Linear and Multivariate Regression Analysis

Scope

• Ordinary Least Squares (OLS)

• Multivariate regression

• Functional form specification

• Model diagnostics and misspecification

 

Departmental Emphasis
Regression is treated as a tool for conditional description, not as automatic evidence of causality.

 

Applications

• Policy evaluation

• Market structure analysis

• Institutional performance studies

 

2. Maximum Likelihood and Estimation Theory

Scope

• Likelihood-based estimation

• Consistency, efficiency, and bias

• Distributional assumptions

• Model selection criteria

 

Departmental Emphasis
Estimation techniques are evaluated not only statistically, but in terms of whether their assumptions are economically defensible.

 

Applications

• Structural modeling

• Risk estimation

• Financial data analysis

 

3. Instrumental Variables and Identification Strategies

Scope

• Instrument relevance and exogeneity

• Weak instruments

• Natural experiments

• Structural vs. reduced-form approaches

 

Departmental Emphasis
Identification strategies are scrutinized for institutional plausibility and theoretical coherence, not merely statistical validity.

 

Applications

• Policy impact studies

• Regulatory analysis

• Labor and public economics research

 

4. Panel Data Models

Scope

• Fixed effects and random effects

• Dynamic panel models

• Unobserved heterogeneity

• Cross-sectional dependence

Departmental Emphasis
Panel methods are used to control for unobserved structure, not to eliminate economic reasoning about heterogeneity.

Applications

• Firm-level analysis

• Industry dynamics

• Longitudinal institutional studies

 

5. Time Series Analysis

Scope

• ARIMA and state-space models

• Stationarity and unit roots

• Cointegration

• Structural breaks and regime shifts

 

Departmental Emphasis
Time series analysis emphasizes structural change and regime instability, rejecting the assumption of stable, timeless parameters.

 

Applications

• Inflation analysis

• Monetary policy diagnostics

• Financial market behavior

 

6. Causal Inference and Experimental Methods

Scope

• Randomized controlled trials

• Quasi-experimental designs

• Difference-in-differences

• Regression discontinuity designs

 

Departmental Emphasis
Experimental credibility does not eliminate interpretation problems. Even well-designed experiments require economic theory to explain why results occur.

 

Applications

• Program evaluation

• Development and health economics

• Policy pilot studies

 

7. Aggregation, Indexes, and Measurement Limits

Scope

• Index number theory

• Aggregation bias

• Measurement error

• Scalar vs. relational variables

 

Departmental Emphasis
The Department explicitly addresses the limits of aggregate measures such as GDP, inflation, and productivity, treating them as inferential constructs rather than objective quantities.

 

Applications

• National income accounting critique

• Inflation interpretation

• Policy stress testing

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