A Genetic Approach to Econometric Modeling

An important problem in economics and other areas of science is finding the mathematical relationship between the empirically observed variables measuring a system. In many conventional modeling techniques, one necessarily begins by selecting the size and shape of the mathematical model. Because the the vast majority of available mathematical tools only handle linear models, this choice is often simply a linear model. After making this choice, one usually then tries to find the values of certain coefficients and constants required by the particular model so as to achieve the best fit between the observed data and the model. But, in many cases, the most important issue is the size and shape of the mathematical model itself. That is, one really wants first to find the functional form of the model that best fits observed empirical data, and, only then, go on to find any constants and coefficients that happen to be needed. Some techniques exist for doing this. We suggest that finding the f..