There are several types of professional economists working in the world today. Academic economists in universities often derive and test theoretical models of various aspects of the economy. Economists in the civil service often study the merits and demerits of policies under consideration by government. Economists employed by a central bank often give advice on whether or not interest rates should be raised, while in the private sector, economists often predict future variables such as exchange rate movements and their effect on company exports.
For all of these economists, the ability to work with data is an important skill. To decide between competing theories, to predict the effect of policy changes, or to forecast what may happen in the future, it is necessary to appeal to facts. In economics, we are fortunate in having at our disposal an enormous amount of facts (in the form of “data”) that we can analyze in various ways to shed light on many economic issues.
The purpose of this book is to present the basics of data analysis in a simple, on mathematical way, emphasizing graphical and verbal intuition. It focusses on the tools that economists apply in practice (primarily regression) and develops computer skills that are necessary in virtually any career path that the economics student may choose to follow.