3 The Birth of Econometrics
Although, quantitative economic analysis is a good three centuries old, econometrics as
a recognized branch of economics only began to emerge in the 1930s and the 1940s with
the foundation of the Econometric Society, the Cowles Commission in the United States,
and the Department of Applied Economics in Cambridge, England.1 This was largely
due to the multi-disciplinary nature of econometrics, comprising of economic theory, data,
econometric methods, and computing techniques. Progress in empirical economic analysis
often requires synchronous developments in all these four components.