(L8) Sandmo Chapter 16 Flashcards
What was significant about Frisch’s model of the business cycle?
Frisch’s model was a significant theoretical contribution that could be empirically tested, though it was too small in scale to depict a real economy.
Who was Jan Tinbergen and what was his contribution to economics?
Jan Tinbergen, originally trained as a physicist, constructed the first comprehensive econometric model of the Dutch economy, contributing significantly to macroeconomic modeling.
What was the scale and complexity of Tinbergen’s models?
Tinbergen developed complex models including a 22-equation system for the Dutch economy and a 48-equation system for the U.S. economy.
How did Tinbergen’s work influence economic policy and forecasting?
His work laid the foundation for the use of large-scale numerical models in business cycle forecasts and public policy design.
What was the nature of economic models before Tinbergen’s work?
Prior to Tinbergen, economic models were small-scale, limited to a few equations and variables, and more intuitively understandable.
What was the Keynes-Tinbergen debate about?
The debate centered on the logical foundations of Tinbergen’s models, with Keynes criticizing their reliance on statistical tests over theory.
How did Keynes view the relationship between theory and empirical data?
Keynes took a strong position on the precedence of theory over statistical tests, suggesting that if data did not confirm a theory, the fault was in the data or analysis.
How did Tinbergen respond to Keynes’s criticism?
Tinbergen addressed the critical questions posed by Keynes, emphasizing the role of empirical analysis in refining economic theory.
What was the long-term impact of the Tinbergen-Keynes debate?
Despite Keynes’s initial criticisms, Tinbergen’s approach to applied quantitative economics proved successful and influential in the long run.
