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    A First Lesson

    Uploaded by

    Leo Lenius
    This document provides an example of how basic mathematical equations can be overcomplicated in an attempt to demonstrate econometric principles. It begins by stating the simple equation 1+1=2 and then proceeds to unnecessarily rewrite this equation using advanced mathematical concepts like logarithms, trigonometric functions, limits, and vectors in an effort to "simplify" the original statement into a much more complex expression. The purpose is to illustrate how equations in econometrics can become obscured rather than clarified if principles are not properly understood.

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    A First Lesson

    Uploaded by

    Leo Lenius
    69 views2 pages
    This document provides an example of how basic mathematical equations can be overcomplicated in an attempt to demonstrate econometric principles. It begins by stating the simple equation 1+1=2 and then proceeds to unnecessarily rewrite this equation using advanced mathematical concepts like logarithms, trigonometric functions, limits, and vectors in an effort to "simplify" the original statement into a much more complex expression. The purpose is to illustrate how equations in econometrics can become obscured rather than clarified if principles are not properly understood.

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    This document provides an example of how basic mathematical equations can be overcomplicated in an attempt to demonstrate econometric principles. It begins by stating the simple equation 1+1=2 and then proceeds to unnecessarily rewrite this equation using advanced mathematical concepts like logarithms, trigonometric functions, limits, and vectors in an effort to "simplify" the original statement into a much more complex expression. The purpose is to illustrate how equations in econometrics can become obscured rather than clarified if principles are not properly understood.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    69 views2 pages

    A First Lesson

    Uploaded by

    Leo Lenius
    This document provides an example of how basic mathematical equations can be overcomplicated in an attempt to demonstrate econometric principles. It begins by stating the simple equation 1+1=2 and then proceeds to unnecessarily rewrite this equation using advanced mathematical concepts like logarithms, trigonometric functions, limits, and vectors in an effort to "simplify" the original statement into a much more complex expression. The purpose is to illustrate how equations in econometrics can become obscured rather than clarified if principles are not properly understood.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 2

    A FIRST LESSON IN ECONOMETRICS (This is an extension of John J

    Siegfried’s article in Journal of Econometrics)

    Every budding econometric student must learn early that it is never in good taste
    to express the sum of two quantities in the form

    1+1=2 (1)

    Any first year college student is aware that

    1 = ln e (2)

    and further that

    1 = sin2 q + cos2 q (3)

    In addition, it must be obvious to the casual reader that

    ∞
    1
    2=∑ n (4)
    n =0 2

    Therefore equation (1) can be rewritten more scientifically as

    ∞
    1
    2
    ln e + sin q + cos q = 2
    ∑2
    n =0
    n (5)

    We all learned in grade school that

    1 = cosh p 1 −tanh 2
    p (6)

    and since
    δ
     1
    e = lim 1 +  (7)
    δ →∞
     δ

    equation (5) can be easily simplified to read:

    δ
      1 
    ln δlim 1 +   + (sin2 q + cos2 q) =
     →∞ δ  
    ∞
    cosh p 1 − tanh 2
    p
    ∑
    n =0 2n
    (8)

    If we note that
    0! = 1 (9)
    And recall that the inverse of the transpose is the transpose of the inverse, we
    can unburden ourselves of the restriction to one dimensional space by
    introducing the vector X, where

    (X )' −1
    − ( X −1 ) = 0
    '
    (10)

    Combining equation (9) with equation 10 gives

    [( X ′) −1
    (
    − X −1 != 1 )]
    '
    (11)

    Which when inserted into equation (8) reduces our expression to

      ′ 1 
    ( ) (
    ln lim ( X ′) − X −1  +  + sin 2 q + cos 2 q =
    −1
    )
    δ →∞ 
       δ 

    ∞
    cosh p 1 − tanh 2
    p
    ∑
    n =0 2 n
    (12)

    At this point it should be obvious to everyone that equation (12) is much clearer
    and more easily understood than equation (1). Other methods of similar nature
    can be used to simplify equation (1), but these will become obvious once you
    grasp the underlying principles of econometrics.

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