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The Elgar Companion To Economics and Philosophy

The Elgar Companion To Economics and Philosophy

Elgar original reference

Edited by John B. Davis, Alain Marciano and Jochen Runde

The Elgar Companion to Economics and Philosophy aims to demonstrate exactly how these two important areas have always been linked, and to illustrate the key areas of overlap. The contributors are well-known and distinguished authors from a variety of disciplines, who have been invited both to survey and to provide a personal assessment of current and prospective future states of their respective areas of philosophical interest.

Chapter 13: Models in Economics

Marcel Boumans

Subjects: economics and finance, methodology of economics


Marcel Boumans In general, I believe that one who claims to understand the principles of flight can reasonably be expected to be able to make a flying machine, and that understanding business cycles means the ability to make them too, in roughly the same sense. (Lucas 1981, p. 8) Introduction At the fifth European meeting of the Econometric Society held in Namur, Belgium, 1935, Jan Tinbergen (1903–1994) read a paper on ‘A mathematical theory of business cycle policy’. As usual, a report of this meeting appeared in Econometrica, the society’s journal. This time the report was written by Hans Staehle and published in 1937. The report noted that Tinbergen’s paper consisted of three parts: 1. the presentation of a simplified business cycle ‘mechanism’, 2. an analysis of its various ‘influencing coefficients’ (Beeinflussingskoeffizienten), with a view to discovering those which might be modified by policy, and 3. an analysis of the conditions which would have to be satisfied in order to achieve the aims set by various types of policy. (Staehle 1937, p. 87) The paper appeared as part of Tinbergen’s article ‘Quantitative Fragen der Konjunkturpolitik’ in Weltwirtschaftliches Archiv, published in 1935. At the end of the article, there were summaries in three different languages, English, French and Spanish, in which the word ‘mechanism’ was replaced with ‘scheme’, ‘schéma’ and ‘esquema’ respectively. However, in the article itself, Tinbergen used the term ‘Modell’. This was perhaps the first time an economist used the...

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