Resolved: difference between ML and Econometrics
ML enhances predictive oower of what? Please elaborate a bit more on the difference
1 answers ( 1 marked as helpful)
Predictive power focuses on the out-of-sample properties of forecasts (e.g., performance assessed by RMSE). ML tools aim to predict outcomes. They do not intend to uncover causal relationships. ML tools tend to perform well, but there are always limitations as discussed (e.g., structural breaks).