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What do you mean by Bayesian Econometrics?
The term Bayesian Econometrics is one of the most important parts in Economics as well as econometrics that show how to create perfect economic model on the basis of Bayesian theorem or Bayesian Principle. This shows the probability interpretation that shows the degree of belief against of relative frequency interpretation.
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What do you mean by the Bayes’ Theorem?
The theorem states that Probability of A and B conditional are related to each other by the formula P (A|B) = P (B|A) * P (A) / P (B). Here you can easily get that probability of B on A and the Probability of conditional A is divided by the Probability of B. These have the prior distribution. With the base of this theorem, you can easily get a lot of different examples in the daily routine.
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