On the Reception of Haavelmo’s Econometric Thought

CHOPE Working Paper No. 2012-04

35 Pages Posted: 8 Feb 2012 Last revised: 10 Feb 2012

See all articles by Kevin D. Hoover

Kevin D. Hoover

Duke University - Departments of Economics and Philosophy

Date Written: February 6, 2012

Abstract

Trygve Haavelmo’s The Probability Approach in Econometrics (1944) has been widely regarded as the foundation document of modern econometrics. Nevertheless, its significance has been interpreted in widely different ways. Some modern economists regard it as a blueprint for a provocative, but ultimately unsuccessful, program dominated by the need for a priori theoretical identification of econometric models. They call for new techniques that better acknowledge the interrelationship of theory and data. Others credit Haavelmo with an approach that focuses on statistical adequacy rather than theoretical identification. They see many of Haavelmo’s deepest insights as having been unduly neglected. The current paper uses bibliometric techniques and a close reading of econometrics articles and textbooks to trace the way in which the economics profession received, interpreted, and transmitted Haavelmo’s ideas. A key irony is that the first group calls for a reform of econometric thinking that goes several steps beyond Haavelmo’s initial vision; while the second group argues that essentially what the first group advocates was already in Haavelmo’s Probability Approach from the beginning.

Keywords: Trygve Haavelmo, econometrics, history of econometrics, the probability approach, econometric methodology, Cowles Commission

JEL Classification: B23, B40, C10

Suggested Citation

Hoover, Kevin D., On the Reception of Haavelmo’s Econometric Thought (February 6, 2012). CHOPE Working Paper No. 2012-04, Available at SSRN: https://ssrn.com/abstract=2001485 or http://dx.doi.org/10.2139/ssrn.2001485

Kevin D. Hoover (Contact Author)

Duke University - Departments of Economics and Philosophy ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States

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