“The purpose of the paper is twofold: the first objective is to survey the main developments in econometric thinking and to outline the key concepts of what has been called the LSE/Oxford methodology. Secondly, the more important aspect of the paper considers the practical application of this methodological approach to a particular environment encountered in Africa. Throughout the paper the discussion was in terms of the methodology of estimating single equation econometric models rather than econometric systems. The second half of the paper illustrates the applicability of this methodology in deriving statistically valid inferences from questionable data by developing an empirical model to characterise the transactions demand for money in Kenya.”
