In these three essays, Professor Granger explains the process of
constructing and evaluating an empirical model. Drawing on a wide
range of cases and vignettes from economics, finance, politics and
environment economics, as well as from art, literature, and the
entertainment industry, Professor Granger combines rigour with
intuition to provide a unique and entertaining insight into one of
the most important subjects in modern economics. Chapter 1 deals
with Specification. The process of specifying a model is discussed
using deforestation in the Amazon region of Brazil as an
illustration. Chapter 2 considers Evaluation, and argues that
insufficent evaluation is undertaken by economists, and that models
should be evaluated in terms of the quality of their output. In
Chapter 3, the question of how to evaluate forecasts is considered
at several levels of increasing depth and using a more
sophisticated, technical approach than in the earlier two chapters.
General
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