The Generalized Method of Moments (GMM) is a statistical technique used for estimating parameters in econometric models. It relies on the idea of moment conditions, which are equations that relate the model's parameters to the expected values of certain functions of the data. By using sample data, GMM finds parameter estimates that make the sample moments as close as possible to the theoretical moments derived from the model. GMM is particularly useful when traditional methods, like Ordinary Least Squares (OLS), may not be appropriate due to issues like endogeneity or heteroskedasticity. It is widely applied in various fields, including finance and economics, to analyze complex models where standard assumptions may not hold.