What is 'Econometrics'
Econometrics is the application of statistical and mathematical theories to economics for the purpose of testing hypotheses and forecasting future trends. Econometrics takes economic models and tests them through statistical trials. The results are then compared and contrasted against reallife examples.
BREAKING DOWN 'Econometrics'
Econometrics can be subdivided into two major categories: theoretical and applied. Econometrics uses tools such as frequency distributions, probability and probability distributions, statistical inference, simple and multiple regression analysis, simultaneous equations models and time series methods. An example of a reallife application of econometrics would be to study the hypothesis that as a person's income increases, spending increases.
Lawrence Klein, Ragnar Frisch and Simon Kuznets each won the Nobel Prize in economics for their research in econometrics.

Lawrence Klein
An American economist and winner of the 1980 Nobel Memorial Prize ... 
Ragnar Frisch
A Norwegian economist and joint winner in 1969 of the very first ... 
Trygve Haavelmo
A Norwegian economist who won the 1989 Nobel Memorial Prize in ... 
Jan Tinbergen
A Dutch economist who won the Nobel Memorial Prize in Economics ... 
Simon Kuznets
A RussianAmerican economist and statistician who won the 1971 ... 
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