Bayesian econometrics

Bayesian econometrics is a statistical approach to econometrics that applies Bayesian methods to the analysis of economic data. The Bayesian framework is based on Bayes' theorem, which provides a way to update probabilities as new evidence is acquired. This contrasts with traditional frequentist approaches that do not incorporate prior beliefs. Here are some key features of Bayesian econometrics: 1. **Prior Information**: Bayesian econometrics allows the incorporation of prior beliefs or information about parameters in a model through the use of prior distributions.