Marcel Boumans
- Published in print:
- 2016
- Published Online:
- August 2016
- ISBN:
- 9780198704324
- eISBN:
- 9780191773761
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198704324.003.0032
- Subject:
- Economics and Finance, Economic History, Macro- and Monetary Economics
The interaction between the Cowles Commission and Milton Friedman was a confrontation between two research programs, a Walrasian versus a Marshallian, each claiming to offer the best scientific ...
More
The interaction between the Cowles Commission and Milton Friedman was a confrontation between two research programs, a Walrasian versus a Marshallian, each claiming to offer the best scientific approach for empirical economics. This battle was not only characterized by arguments over simultaneous equations versus partitioning and abstract reasoning versus substantive empirical research, but also about whether or not to adopt investigative methods used in the natural sciences. Although the two sides never reached a consensus, their interaction resulted in a particular test for econometric models, the so-called “naive model test,” designed by Friedman and developed by Carl Christ, a member of the Cowles Commission. However, whilst Friedman regarded a negative test result as a failure of the Walrasian program, Cowles saw it as a diagnostic tool for building larger models.Less
The interaction between the Cowles Commission and Milton Friedman was a confrontation between two research programs, a Walrasian versus a Marshallian, each claiming to offer the best scientific approach for empirical economics. This battle was not only characterized by arguments over simultaneous equations versus partitioning and abstract reasoning versus substantive empirical research, but also about whether or not to adopt investigative methods used in the natural sciences. Although the two sides never reached a consensus, their interaction resulted in a particular test for econometric models, the so-called “naive model test,” designed by Friedman and developed by Carl Christ, a member of the Cowles Commission. However, whilst Friedman regarded a negative test result as a failure of the Walrasian program, Cowles saw it as a diagnostic tool for building larger models.
Lawrence R. Klein
- Published in print:
- 1991
- Published Online:
- October 2011
- ISBN:
- 9780195057720
- eISBN:
- 9780199854967
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195057720.003.0001
- Subject:
- Economics and Finance, Econometrics
Econometrics, as a total subject, is older than macroeconometric model building and deserves a separate historical inquiry. Early investigations of demand–supply functions, income distributions, ...
More
Econometrics, as a total subject, is older than macroeconometric model building and deserves a separate historical inquiry. Early investigations of demand–supply functions, income distributions, family budgets, cost, and production functions have been the subject of historical study. The joint founding of the Econometric Society and the Cowles Commission for Research in Economics represented the beginnings of major steps forward from the 1930s. In addition to some of the papers presented at the Cowles Foundation anniversary party, there have been some separate studies by scholars from the group. More than ten years ago, a seminar was organized to compare models to appreciate their differences and to look for commonalities. In a first phase, the Model Comparison Seminar looked at distributions of multipliers across macroeconomic models, and the outcome of common applications of control theory. This chapter reviews briefly the focal points of interest during the historical period of macroeconometric model development.Less
Econometrics, as a total subject, is older than macroeconometric model building and deserves a separate historical inquiry. Early investigations of demand–supply functions, income distributions, family budgets, cost, and production functions have been the subject of historical study. The joint founding of the Econometric Society and the Cowles Commission for Research in Economics represented the beginnings of major steps forward from the 1930s. In addition to some of the papers presented at the Cowles Foundation anniversary party, there have been some separate studies by scholars from the group. More than ten years ago, a seminar was organized to compare models to appreciate their differences and to look for commonalities. In a first phase, the Model Comparison Seminar looked at distributions of multipliers across macroeconomic models, and the outcome of common applications of control theory. This chapter reviews briefly the focal points of interest during the historical period of macroeconometric model development.
Duo Qin
- Published in print:
- 2013
- Published Online:
- September 2013
- ISBN:
- 9780199679348
- eISBN:
- 9780191758416
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199679348.001.0001
- Subject:
- Economics and Finance, Econometrics, History of Economic Thought
This book is a sequel of Qin's previous OUP volume The Formation of Econometrics: A Historical Perspective. That book traces the history roughly during the period 1930-1960. The present book is ...
More
This book is a sequel of Qin's previous OUP volume The Formation of Econometrics: A Historical Perspective. That book traces the history roughly during the period 1930-1960. The present book is focused on the reformists’ movements mainly during the 1970s and 1980s. After a background description of the formation and consolidation of the Cowles Commission (CC) paradigm, it traces and analyses the three major methodological attempts to resolve problems involved in model choice and specification of the CC paradigm. These attempts have reoriented the focus of econometric research from internal questions (how to optimally estimate a priori given structural parameters) to external questions (how to choose, design, and specify models). Next, it examines various modelling issues and problems through two case studies – modelling the Phillips curve and business cycles. The third part of the book delves into the development of three key aspects of model specification in details – structural parameters, error terms, and model selection and design procedures. The final chapter uses citation analyses to study the impact of the CC paradigm over the span of three and half decades (1970-2005). The citation statistics show that the impact has remained extensive and relatively strong in spite of certain weakening signs. It implies that the reformative attempts have fallen short of causing a paradigm shift.Less
This book is a sequel of Qin's previous OUP volume The Formation of Econometrics: A Historical Perspective. That book traces the history roughly during the period 1930-1960. The present book is focused on the reformists’ movements mainly during the 1970s and 1980s. After a background description of the formation and consolidation of the Cowles Commission (CC) paradigm, it traces and analyses the three major methodological attempts to resolve problems involved in model choice and specification of the CC paradigm. These attempts have reoriented the focus of econometric research from internal questions (how to optimally estimate a priori given structural parameters) to external questions (how to choose, design, and specify models). Next, it examines various modelling issues and problems through two case studies – modelling the Phillips curve and business cycles. The third part of the book delves into the development of three key aspects of model specification in details – structural parameters, error terms, and model selection and design procedures. The final chapter uses citation analyses to study the impact of the CC paradigm over the span of three and half decades (1970-2005). The citation statistics show that the impact has remained extensive and relatively strong in spite of certain weakening signs. It implies that the reformative attempts have fallen short of causing a paradigm shift.
Philip Mirowski and Edward Nik-Khah
- Published in print:
- 2017
- Published Online:
- June 2017
- ISBN:
- 9780190270056
- eISBN:
- 9780190270087
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780190270056.003.0007
- Subject:
- Economics and Finance, History of Economic Thought
One of the most important contributions of the Cowles Commission in the period 1944 to 1954 was to jump-start the formalization of the orthodox approach to the economics of information. The tension ...
More
One of the most important contributions of the Cowles Commission in the period 1944 to 1954 was to jump-start the formalization of the orthodox approach to the economics of information. The tension with the neoliberals also housed at the University of Chicago was fruitful. Members such as Jacob Marschak, Leonid Hurwicz, Kenneth Arrow, and Stanley Reiter all struggled to infuse the utility function with some sort of cognitive capacity. Their struggles to make this do political double-duty set the stage for the subsequent evolution of the economics of information.Less
One of the most important contributions of the Cowles Commission in the period 1944 to 1954 was to jump-start the formalization of the orthodox approach to the economics of information. The tension with the neoliberals also housed at the University of Chicago was fruitful. Members such as Jacob Marschak, Leonid Hurwicz, Kenneth Arrow, and Stanley Reiter all struggled to infuse the utility function with some sort of cognitive capacity. Their struggles to make this do political double-duty set the stage for the subsequent evolution of the economics of information.
Qin Duo
- Published in print:
- 2013
- Published Online:
- September 2013
- ISBN:
- 9780199679348
- eISBN:
- 9780191758416
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199679348.003.0002
- Subject:
- Economics and Finance, Econometrics, History of Economic Thought
Econometrics stems directly from the post-1940 works of Haavelmo and the Cowles Commission (CC) Monograph 10. This paper examines the consolidation process of the CC research programme mainly during ...
More
Econometrics stems directly from the post-1940 works of Haavelmo and the Cowles Commission (CC) Monograph 10. This paper examines the consolidation process of the CC research programme mainly during the 1950-70 period from three aspects: (i) developments of econometrics textbooks, (ii) emerging themes and trends in econometric research, (iii) the contribution of the programme to empirical modelling of real-world issues. The examination reveals that the programme has gained dominance primarily through its adherence to the scientific banner and style rather than its empirical relevance. The adoption of the hard science methodology is decisive in winning over the academic community; the taxonomy of econometrics into steps involving primarily specification, identification and estimation has played a pivotal role in generating compartmentalised research topics with manageable technical challenge and also in facilitating the educational need for compiling self-contained subjects and definitely soluble questions.Less
Econometrics stems directly from the post-1940 works of Haavelmo and the Cowles Commission (CC) Monograph 10. This paper examines the consolidation process of the CC research programme mainly during the 1950-70 period from three aspects: (i) developments of econometrics textbooks, (ii) emerging themes and trends in econometric research, (iii) the contribution of the programme to empirical modelling of real-world issues. The examination reveals that the programme has gained dominance primarily through its adherence to the scientific banner and style rather than its empirical relevance. The adoption of the hard science methodology is decisive in winning over the academic community; the taxonomy of econometrics into steps involving primarily specification, identification and estimation has played a pivotal role in generating compartmentalised research topics with manageable technical challenge and also in facilitating the educational need for compiling self-contained subjects and definitely soluble questions.
Qin Duo
- Published in print:
- 2013
- Published Online:
- September 2013
- ISBN:
- 9780199679348
- eISBN:
- 9780191758416
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199679348.003.0001
- Subject:
- Economics and Finance, Econometrics, History of Economic Thought
The background of the book is briefly explained, followed by a short literature review. The content layout and main topics by each chapter are summarised.
The background of the book is briefly explained, followed by a short literature review. The content layout and main topics by each chapter are summarised.
Ivan Moscati
- Published in print:
- 2018
- Published Online:
- December 2018
- ISBN:
- 9780199372768
- eISBN:
- 9780199372805
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780199372768.003.0011
- Subject:
- Economics and Finance, Microeconomics
Chapter 10 reconstructs the first part of the American debate on expected utility theory (EUT), which ranges from 1947, when the second edition of John von Neumann and Oskar Morgenstern’s Theory of ...
More
Chapter 10 reconstructs the first part of the American debate on expected utility theory (EUT), which ranges from 1947, when the second edition of John von Neumann and Oskar Morgenstern’s Theory of Games was published, to April 1950. In this period, a number of eminent American economists, including Milton Friedman, Leonard J. Savage, Jacob Marschak, Paul Samuelson, and William Baumol, wrote papers in which they took stances on the validity of EUT and the nature of the cardinal utility function u featured in the expected utility formula. Friedman, Savage, and Marschak supported EUT, although for different reasons, while Samuelson and Baumol rejected it. Regarding the nature of the cardinal utility function u, however, they all shared the view that it is interchangeable with the utility function U that the earlier utility theorists had used to analyze choices between riskless alternatives.Less
Chapter 10 reconstructs the first part of the American debate on expected utility theory (EUT), which ranges from 1947, when the second edition of John von Neumann and Oskar Morgenstern’s Theory of Games was published, to April 1950. In this period, a number of eminent American economists, including Milton Friedman, Leonard J. Savage, Jacob Marschak, Paul Samuelson, and William Baumol, wrote papers in which they took stances on the validity of EUT and the nature of the cardinal utility function u featured in the expected utility formula. Friedman, Savage, and Marschak supported EUT, although for different reasons, while Samuelson and Baumol rejected it. Regarding the nature of the cardinal utility function u, however, they all shared the view that it is interchangeable with the utility function U that the earlier utility theorists had used to analyze choices between riskless alternatives.
Philip Mirowski and Edward Nik-Khah
- Published in print:
- 2017
- Published Online:
- June 2017
- ISBN:
- 9780190270056
- eISBN:
- 9780190270087
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780190270056.001.0001
- Subject:
- Economics and Finance, History of Economic Thought
In contrast with conventional histories of “economic rationality,” in this book we propose that the history of modern microeconomics is better organized as the treatment of information in postwar ...
More
In contrast with conventional histories of “economic rationality,” in this book we propose that the history of modern microeconomics is better organized as the treatment of information in postwar economics. Beginning with a brief primer on the nature of information, we then explore how economists first managed their rendezvous with it, tracing its origins to the Neoliberal Thought Collective and Friedrich Hayek. The response to this perceived threat was mounted by the orthodoxy at the Cowles Commission, leading to at least three distinct model strategies. But the logic of the models led to multiply cognitively challenged agents, which then logically led to a stress on markets to rectify those weaknesses. Unwittingly, the multiple conceptions of agency led to multiple types of markets; and the response of the orthodoxy was to shift research away from previous Walrasian themes to what has become known as market design. But internal contradictions in the market design programs led to a startling conclusion: just like their agents, the orthodox economists turned out to be not as smart as they had thought. A little information had turned out to be a dangerous thing.Less
In contrast with conventional histories of “economic rationality,” in this book we propose that the history of modern microeconomics is better organized as the treatment of information in postwar economics. Beginning with a brief primer on the nature of information, we then explore how economists first managed their rendezvous with it, tracing its origins to the Neoliberal Thought Collective and Friedrich Hayek. The response to this perceived threat was mounted by the orthodoxy at the Cowles Commission, leading to at least three distinct model strategies. But the logic of the models led to multiply cognitively challenged agents, which then logically led to a stress on markets to rectify those weaknesses. Unwittingly, the multiple conceptions of agency led to multiple types of markets; and the response of the orthodoxy was to shift research away from previous Walrasian themes to what has become known as market design. But internal contradictions in the market design programs led to a startling conclusion: just like their agents, the orthodox economists turned out to be not as smart as they had thought. A little information had turned out to be a dangerous thing.
Philip Mirowski and Edward Nik-Khah
- Published in print:
- 2017
- Published Online:
- June 2017
- ISBN:
- 9780190270056
- eISBN:
- 9780190270087
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780190270056.003.0005
- Subject:
- Economics and Finance, History of Economic Thought
The Socialist Calculation Controversy first raised the political problem of agent epistemology in the history of economics. The Cowles Commission, primarily comprising market socialists, sought to ...
More
The Socialist Calculation Controversy first raised the political problem of agent epistemology in the history of economics. The Cowles Commission, primarily comprising market socialists, sought to answer and refute Hayek and the neoliberals. The key point of contention was to determine what it meant for The Market to know something, which was unmistakably a political issue. This chapter lays the groundwork for the entrance of information considerations into neoclassical microeconomics.Less
The Socialist Calculation Controversy first raised the political problem of agent epistemology in the history of economics. The Cowles Commission, primarily comprising market socialists, sought to answer and refute Hayek and the neoliberals. The key point of contention was to determine what it meant for The Market to know something, which was unmistakably a political issue. This chapter lays the groundwork for the entrance of information considerations into neoclassical microeconomics.
