Tjalling Koopmans: Economics

“Econometrics may be defined as the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference.”

Tjalling Koopmans

Paul Samuelson, Tjalling Koopmans, and Richard Stone. "Report of the evaluative committee for Econometrica." Econometrica- journal of the Econometric Society. (1954): 141-146.

“We look upon economic theory as a sequence of conceptual models that seek to express in simplified form different aspects of an always more complicated reality.”

Tjalling Koopmans

Source: Three Essays (1957), p. 142

Reality

“… a rather different class of applications of the idea of best allocation of scarce resources… usually referred to as the theory of optimal economic growth. In most studies of this kind made in the countries with market economies there is not an identifiable client to whom the findings are submitted as policy recommendations. Nor is there an obvious choice of objective function, such as cost minimization or profit maximization in the studies addressed to individual enterprises. The field has more of a speculative character. The models studied usually contain only a few highly aggregated variables. One considers alternative objective functions that incorporate or emphasize various strands of ethical, political, or social thought. These objectives are then tried out to see what future paths of the economy they imply under equally simplified assumptions of technology or resource availability.”

Tjalling Koopmans

Source: Concepts of Optimality and Their Uses, 1975, p. 244

Idea , Optimism , Study , Future

“While it was long possible and sometimes tempting for physicists to deny the usefulness of the molecular hypothesis, we economists have the good luck of being some of the ‘molecules’ of economic life ourselves, and of having the possibility through human contacts to study the behavior of other ‘molecules’.”

Tjalling Koopmans

Tjalling Koopmans in: Review of economics and statistics, Vol. 31 -(1949), p. 87

Life , Behavior , Study

“According to a frequently cited definition, economics is the study of “best use of scarce resources.” The definition is incomplete. “Second best” use of resources, and outright wasteful uses, have equal claim to attention. They are the other side of the coin.”

Tjalling Koopmans

Source: Concepts of Optimality and Their Uses, 1975, p. 239: Lead sentence

Study

“Optimizing responses of economic agents are simultaneously feasible only if the proper prices are already known to them. But these prices must somehow themselves be the result of the same responses.”

Tjalling Koopmans

Tjalling C. Koopmans, "Is the Theory of Competitive Equilibrium With It?," The American Economic Review, Vol. 64, No. 2, May 1974; p. 327

Optimism

“[This work urges] a clearer separation, in the construction of economic knowledge, between reasoning and recognition of facts, for the better protection of both.”

Tjalling Koopmans

Source: Three Essays (1957), p. viii

Knowledge

“The early thirties brought what liberal economists called the Great Depression and Marxist economists described as the great crisis of capitalism. It dawned on me that the economic world order was unreliable, unstable, and, most of all, iniquitous. I sought intellectual contacts and friendship with a group of socialist students and also with a small handful of communist-oriented students and unemployed workers.”

Tjalling Koopmans

" Tjalling C. Koopmans - Biographical http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1975/koopmans-bio.html". Nobelprize.org. Nobel Media AB 2013. Web. 9 Jun 2014.

Friendship , World

“One is led to conclude that economics as a scientific discipline is still somewhat hanging in the air.”

Tjalling Koopmans

Source: Three Essays (1957), p. 141