Probability, Econometrics and Truth

• Introduction; 1. The philosophy of induction; 2. Probability and indifference: Intermezzo: a formal scheme of reference; 3. Reactive frequency and induction; 4. Probability and belief; 5. The theory of simplicity; 6. From probability to econometrics; 7. Econometric modelling; 8. In search of homogeneity; 9. Positivism and the aims of econometrics; 10. Probability, econometrics and truth; Personalia; References; Indexes.

'A terrible gap has opened up in recent years between economists and econometricians, which has even resulted in some universities in an organisational separation of teaching and research in the two fields. Econometrics has become so technical that many economies have virtually abandoned the hope of mastering it and modern economies, on the other hand, seem to most econometricians to be a thousand miles removed from their abiding concern with the problems of inductive inference. What is needed to improve communication between the two camps is more understanding of econometrics among economists but, equally, more grasp of economics among econometricians. Hugo Keuzenkampf fulfils the latter requirement: here is an econometrician, well versed in the philosophy of economics, who views the issues of probability theory from the standpoint of an economist rather than a statistician. I have rarely read a book on econometric methodology from which I have learned so much. Econometrics cannot test, it can only estimate, says Keuzenkampf. This is a thesis I find hard to swallow but as such is the quality of his argument that he has almost convinced me of it (and I say this as one who is not dealt with too kindly in the pages that follow).' Mark Blaug, University of Exeter