“Haavelmo was the first to recognize the capacity of economic models to guide policies. This paper describes some of the barriers that Haavelmo’s ideas have had (and still have) to overcome, and lays out a logical framework that has evolved from Haavelmo’s insight and matured into a coherent and comprehensive account of the relationships between theory, data and policy questions. The mathematical tools that emerge from this framework now enable investigators to answer complex policy and counterfactual questions using simple routines, some by mere inspection of the model’s structure.”

—  Judea Pearl

Judea Pearl, "Trygve Haavelmo and the emergence of causal calculus." University of California Los Angeles, Computer Science Department, CA. 2012.

Adopted from Wikiquote. Last update June 3, 2021. History

Help us to complete the source, original and additional information

Do you have more details about the quote "Haavelmo was the first to recognize the capacity of economic models to guide policies. This paper describes some of the …" by Judea Pearl?
Judea Pearl photo
Judea Pearl9
Computer scientist 1936

Related quotes

Richard Rumelt photo

“I consider myself a mainstream researcher in the field of business policy, and the ideas I want to describe in this paper concern the foundations of a theory of business strategy that is rooted in economics. But is such a paper, whatever its merits, really appropriate at a conference entitled 'Non-traditional Approaches to Policy Research'? Surprisingly, it is. The use of economic theory to model and explicate business strategy, as it is understood within the field of business policy, is distinctly non-traditional.”

Richard Rumelt (1942) American economist

Source: "Towards a strategic theory of the firm." 1997, p. 131; Lead paragraph

Olivier Blanchard photo

“Lucas and Sargent’s main argument was that Keynesian economics had ignored the full implications of the effect of expectations on behavior. The way to proceed, they argued, was to assume that people formed expectations as rationally as they could, based on the information they had. Thinking of people as having rational expectations had three major implications, all highly damaging to Keynesian macroeconomics. …
The first implication was that existing macroeconomic models could not be used to help design policy. … The second implication was that when rational expectations were introduced in Keynesian models, these models actually delivered very un-Keynesian conclusions. … The third implication was that if people and firms had rational expectations, it was wrong to think of policy as the control of a complicated but passive system. Rather, the right way was to think of policy as a game between policy makers and the economy. …
To summarize: When rational expectations were introduced, Keynesian models could not be used to determine policy; Keynesian models could not explain long-lasting deviations of output from the natural level of output; the theory of policy had to be redesigned, using the tools of game theory.”

Olivier Blanchard (1948) French economist

Source: Macroeconomics (7th Edition, 2017), Ch. 24 : Epilogue: The Story of Macroeconomics

Robert Fogel photo

“Economic history has contributed significantly to the formulation of economic theory. Among the economists who have found history an important source for their ideas are Smith, Malthus, Marx, Marshall, Keynes, Hicks, Arrow, Friedman, Solow, and Becker. Failure to take account of history, as Simon Kuznets (1941) stressed, has often led to a misunderstanding of current economic problems by investigators who have not realized that their generalizations rested upon transient circumstances. Nowhere is the need to recognize the role of long-run dynamics more relevant than in such pressing current issues as medical care, pension policies, and development policies.”

Robert Fogel (1926–2013) American economist, historian

Robert Fogel (1993) " Economic Growth, Population Theory, And Physiology: The Bearing Of Long-Term Processes On The Making Of Economic Policy http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1993/fogel-lecture.pdf." Nobel lecture.

Douglass C. North photo

“In some respects this is intended to be a revolutionary book, but in other respects it is very traditional indeed. It is revolutionary in that we have developed a comprehensive analytical framework to examine and explain the rise of the Western world; a framework consistent with and complementary to standard neoclassical economic theory.”

Douglass C. North (1920–2015) American Economist

Source: The rise of the western world, 1973, p. vii, Preface

“The purpose of this book is to show how economic analysis can be used in formulating business policies. It is therefore a departure from the main stream of economic writings on the theory of the firm, much of which is too simple in its assumptions and too complicated in its logical development to be managerially useful. The big gap between the problems of logic that intrigue economic theorists and the problems of policy that plague practical management needs to be bridged in order to give executives access to the practical contributions that economic thinking can make to top-management policies.”

Joel Dean (1906–1979) American economics wrtier

Preface
Managerial Economics, 1951

Zbigniew Brzeziński photo

“…foreign policy of a pluralistic democracy like the United States should be based on bipartisanship because bipartisanship is the means and the framework for formulating policies based on moderation and on the recognition of the complexity of the human condition. That has been the tradition since the days of Truman and Vandenberg all the way until recent times.”

Zbigniew Brzeziński (1928–2017) Polish-American political scientist

Address to the New American Strategies Conference, (October 28, 2003).

Neelam Sanjiva Reddy photo

“The President of India is the constitutional head, who has no policy and programme of his own. It is the Government of the day which chooses the policy and programme to be pursued within the framework of the constitution…[would] protect and defend the Constitution.”

Neelam Sanjiva Reddy (1913–1996) sixth President of India

Source: Dr.Janak Raj Jai Presidents of India, 1950-2003 http://books.google.co.in/books?id=r2C2InxI0xAC&pg=PA126, Daya Books, 1 January 2003, P.133

Paul Krugman photo

“To make a harsh but not entirely unjustified analogy, a government wedded to the ideology of competitiveness is as unlikely to make good economic policy as a government committed to creationism is to make good science policy, even in areas that have no direct relationship to the theory of evolution.”

Paul Krugman (1953) American economist

Pop Internationalism (1996), Competitiveness: A Dangerous Obsession (1994)

Richard Rumelt photo

“The kernel of a strategy contains three elements: a diagnosis, a guiding policy, and coherent action.”

Richard Rumelt (1942) American economist

Source: Good Strategy Bad Strategy, 2011, p. 7

James Tobin photo

“With the publication of J. M. Keynes’s General Theory in 1936 and the mathematical formalizations of his theory by J. R. Hicks (1937) and others, the language of macro-economic theory became systems of simultaneous equations. These are general equilibrium systems of interdependence in the sense that the relationships describe an entire national economy, not just a particular industry or sector. The systems are usually not completely closed; they depend on exogenous parameters including instruments controlled by policy-makers. Seeking definite relationships of economic outcomes to policies and other exogenous variables, qualitative and quantitative, these models sacrifice detail and generality, limiting the number of variables and equations by aggregations over agents, commodities, assets, and time.”

James Tobin (1918–2002) American economist

Source: "Money and Finance in the Macro-Economic Process" (1982), p. 12

Related topics