Book Review. Application of Econometrics in Economics

According to Karl Popper, one of 20th century's greatest philosophers of science, “theories are nets cast to catch what we call ´the world´: to rationalize, to explain, and to master it”. And that is right. Scientists and researchers seek to catch reality by mean of theories. In the case of economics, we seek to catch “economic reality”. We have economic theories. In fact, there are several approaches within economic theory (neoclassical economics, behavioral economics, institutionalism, post-Keynesianism, etc.). But we need specific tools and methods in order to evaluate in a rigorous way the connection between our theories and economic reality. In that context, econometrics become a very important aspect of research in economics. So, in the book Applications of Econometrics in Economics, which is a compilation of Debesh Bhowmik's papers, we can find several demonstrations of this in practice since Dr. Bhowmik shows how econometrics can be used in several ways to perform interesting and relevant research with respect to different aspects of economic reality (namely, growth, inflation, employment, productivity, crisis, international trade, globalization, financial integration, poverty, inequality, etc.). In that vein, he writes: “Nowadays, quantitative economics plays an important role in theory and in practice where econometric models and their applications in the economic analysis have acquired both the educational values and policy prescriptions” (p. xvii).