Nobel Prizes in Economic Sciences in 1969

Nobel Prizes in Economic Sciences

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel has been awarded 44 times to 71 Laureates between 1969 and 2012. Ragnar Anton Kittil Frisch and  Jan Tinbergen won the first Nobel Memorial Prize in Economic Sciences in 1969.

Ragnar Frisch, Jan Tinbergen

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1969 was awarded jointly to Ragnar Frisch and Jan Tinbergen "for having developed and applied dynamic models for the analysis of economic processes"

Ragnar Frisch

Ragnar Anton Kittil Frisch (3 March 1895 – 31 January 1973) was a Norwegian economist He is known for having founded the discipline of econometrics, and in 1933 to have created the widely used term pair macroeconomics / microeconomics.

Econometrics is the application of mathematics, statistical methods, and, more recently, computer science, to economic data and is described as the branch of economics that aims to give empirical content to economic relations.  More precisely, it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference." An influential introductory economics textbook describes econometrics as allowing economists "to sift through mountains of data to extract simple relationships." The first known use of the term "econometrics" (in cognate form) was by Paweł Ciompa in 1910. Ragnar Frisch is credited with coining the term in the sense that it is used today.

Econometrics is the unification of economics, mathematics, and statistics. This unification produces more than the sum of its parts. Econometrics adds empirical content to economic theory allowing theories to be tested and used for forecasting and policy evaluation.

Jan Tinbergen

Tinbergen became known for his 'Tinbergen Norm', which is the principle that, if the difference between the least and greatest income in a company exceeds a rate of 1:5, that will not help the company and may be counterproductive.

Tinbergen developed the first national comprehensive macroeconomic model, which he first developed in 1936 for theNetherlands, and later applied to the United States and the United Kingdom. In his work on macroeconomic modelling and economic policy making, Tinbergen classified some economic quantities astargets and others as instruments. Targets are those macroeconomic variables the policy maker wishes to influence, whereas instruments are the variables that the policy maker can control directly. Tinbergen emphasized that achieving the desired values of a certain number of targets requires the policy maker to control an equal number of instruments.

Tinbergen's classification remains influential today, underlying the theory of monetary policy used by central banks. Many central banks today regard the inflation rate as their target; the policy instrument they use to control inflation is the short-term interest rate.

Tinbergen's work on macroeconomic models was later continued by Lawrence Klein, contributing to another Nobel Memorial Prize in Economic Sciences. For his cultural contributions, he was given the Gouden Ganzenveer in 1985.

Tinbergen’s econometric modelling lead to a lively debate with well several known participants including J.M. Keynes, Ragnar Frisch and Milton Friedman. The debate is sometime referred to as the Tinbergen debate.

We will talking about the contribution by made other honourable winners of Nobel prize in Economic sciences in our further articles on the same topic.

 Pradeep Vashisht