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The “Probabilistic Revolution”

  • Peter Tryfos
Part of the Advanced Studies in Theoretical and Applied Econometrics book series (ASTA, volume 41)

Abstract

Historians of econometrics attribute the domination of the stochastic model in the form we know it today to the influence of one work, Trygve Haavelmo’s The Probability Approach in Econometrics, published in 1944 but written a few years earlier. As Qin (1993:7–8) writes:

Prior to the 1930s, probability theory was commonly rejected as being unsuitable as a basis for analyzing economic data. . . . Changes took place from the 1930s and onwards as more and more statistical methods were tried in the arena of applied economics, and as concern grew stronger to get the applied works using these methods fully justified in standard economics. The changes were also accelerated by the substantial progress made in mathematical statistics with regard to multivariate models since the 1920s, and in the axiomatization of probability theory in. the early 1930s. There thus rose a movement to transform economics into a real science. . . . By the time that Trygve Haavelmo argued for a full adoption of the probability approach as the foundation of econometric theory in the early 1940s (Haavelmo 1944)—later referred to as the `Haavelmo revolution’—it hardly stirred up any fundamental conceptual shifts of a revolutionary significance in econometrics or economics.

Keywords

Probability Approach Classical Linear Model Full Adoption Joint Frequency Distribution Minimum Variance Linear 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media Dordrecht 2004

Authors and Affiliations

  • Peter Tryfos
    • 1
  1. 1.York UniversityTorontoCanada

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