Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149686
Authors: 
Hoover, Kevin D.
Year of Publication: 
2012
Series/Report no.: 
CHOPE Working Paper No. 2012-04
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.
Subjects: 
Trygve Haavelmo
econometrics
history of econometrics
the probability approach
econometric methodology
Cowles Commission
JEL: 
B23
B40
C10
Document Type: 
Working Paper

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