"Econometrics can be defined as the study in which the tools of
economic theory, statistical inference and mathematics are
systematically applied, using observed data, to the analysis of
economic laws. It is therefore concerned with the "empirical
determination of economic laws", Brown (1991). Economic theories are
written in mathematical form and are then analyzed using statistical
methods. If the observed data are found to be incompatible with the
predictions of the theory, it is rejected. Theories are accepted if
the data are found to fit the theory."
source: Trinity College Dublin
"Econometrics is a branch of economics that applies statistical
methods to the empirical study of economic theories and relationships.
It is as a form of mathematical economics. By being able to translate
qualitative statements in quantitative measurements, statements can at
least in principle be objectively proven, disproven, measured, and
compared. Econometrics differs from statistics done in other fields
since controlled experiments are often impractical, so econometics has
to frequently deal with data as is."
"Econometrics is the field of economics that is concerned with the
application of mathematical statistics and the tools of statistical
inference to the empirical measurement of relationships postulated by
economic theory. That is, econometrics (hopefully) uses some clever
combination of economic theory and mathematical statistics. Typically,
application of econometric methods involves the following elements:
# formulating an economic model appropriate to the questions to be answered;
# reviewing the available statistical models and the assumptions
underlying these models, and selecting the form most suitable for the
problem at hand;
# obtaining appropriate data, properly defined and matching the
concepts of the economic model;
# finding suitable computer software to enable the calculations
necessary for estimating and testing the econometric model.
The ultimate goal of an econometric exercise is to see whether an
economic model is consistent with empirical (observed) behavior as
reflected in the data."
Basically, econometricians take economic data and try to create
mathematical models that explains it. They also sometimes us their
data and models to prove or disprove theorems that come from the
general field of economics.
As mentioned above in the Wikipedia article, a very simple example of
an econometric relationship is:
Personal Expenditure = Propensity to Spend * Income + random error
An econometrician would try to use actual data from the economy to
figure out the real mathematical relationship, if any, between these
Often, econometrics involves creation of very elaborate models. There
are literally thousands of examples of econometric models on the
internet. See the results of this Google search:
"an econometric model" example
As for the bounds and future of econometrics, a lot of the information
on that subject is highly technical, but basically there's a general
trend toward improved data collection techniques and more
sophisticated computer models.
Here's a good paper on this subject:
"Laws and Limits of Econometrics," hosted by Yale University:
(The document is in PDF format, so the Adobe Acrobat Reader is
required. If you don't have that, visit:
"an econometric model", example
"future of econometrics"
I hope this helps.