Generalized Method of Moments

The Generalized Method of Moments (GMM) is a statistical technique used to estimate parameters in models, particularly when data is complex or incomplete. It works by using sample moments—calculations that summarize data (like averages)—to achieve estimates that reflect the underlying population. GMM is widely used in econometrics, allowing researchers to handle various types of data and assumptions about relationships. It’s flexible and robust, making it useful in situations where traditional methods may not work well, helping economists and analysts derive meaningful insights from real-world data.